It's been a hard day's year!
"It's been a hard day's night,
and I've been working like a dog,
it's been a hard day's night,
I should be sleeping like a log."
It's been a hard day's year! That's for sure. This year has been one of the most trying years I have ever had in my life. I know I have only been part of the Minyan family for a short amount of time so I thought I would take a moment and share my past year with you. This way you get to learn a bit more about me, which is always a good thing, and maybe my writings will seem more familiar because you know me better as a person.
Before my current job of running my fund, I was an employee at a rather large broker/dealer (see my profile) and while I did partake in a number of duties, my main job was to proprietarily trade their money. In fact, truth be told, my job now is pretty much the same thing. I wake up around the same time, write my column, and attempt to make money by waging capital. What is different you ask? The transition must have been easy and this year must have been a snap! Wrong.
This year has truly been a transitional one in the every sense of the word. I went from an environment where if I was wrong (i.e. lost money) I caught some heat from my bosses but once you walk in the next day you are back where you started. What I mean to say is there was an endless well of capital.
One other difference was compensation. My salary and bonus had very little to do with my performance trading. Many of the big banks pay comp out based on many different things. I had a difficult time understanding this and trying to figure out why I was being paid on my "value added" as opposed to the money I made. Ultimately, it was this that made me decide to leave and take the biggest chance that I have ever taken, starting up my own fund.
In the course of my life I have been blessed, I mean truly blessed, with whom I have worked for and with. At each stage of my career I have had people to look up to who were not only educated, fantastic traders, but also menschs in every aspect of life. Each of them has taught me a lot about the markets and trading but more importantly about life.
It is because of these mentors that I am where I am. I owe them a lot and they know who they are. I wish that 2004 will only bring them and their loved ones the best in everything. Through them and the opportunities they have given me I have learned lessons one can only learn by running money and feeling the pressure to produce or you don't get paid.
Maybe many of you Minyans know what it is like to eat what you kill (that's code for if I don't produce money, I don't get paid) and maybe many of you don't. The way my fund is structured there is no management fee. To compensate for that, I have a higher than average share of the profits that are generated. While this deal may sound sweet, and it is, it has put tremendous strain on me over the past year. Much of this year was spent fine turning myself into an emotional machine.
One of the hardest things that I have learned to do is to become bigger than my emotions. Many times over the past nine months I have lost money by selling out stocks at the bottom. Instead of looking at the chart and seeing that it was not the place to sell; I was thinking about my rent and how I was going to pay it!
As I struggled throughout the summer months to crawl back from being down on the year and as I am now about to finish 2003 in the black, I look back on the ups and downs and the lessons I have learned. I learned what it was like to have a thought and put money behind it. Many of my friends and family don't, and will never understand what that means. Some people are just content to collect a paycheck and they strive for comfort. I can say that I and really any trader out there live on the edge. We live somewhere where it is scary to think about what we do, and what can be lost, but that's what keeps you from failing. That is what drives you to success.
I have fought many battles over the last year and I really had to grow up. I matured on an emotional level and learned the value of trading with a clear head. I have had periods where I was down so much that I never thought I would get paid again. I learned that you can't sit there and cry about it. You have to pull yourself up and make money back. You have to force yourself to come up with moneymaking ideas. In the movie, A League of Their Own, Tom Hanks says, "There's no crying in baseball!" Well the same holds true in trading. There is no whining or crying, or talking about what you could've done, or what you should've done. When something is done, it's done. Time to move on to the next trade.
If someone asked me the number one characteristic that makes up a good trader, I would have to answer that it is an emotionless one. This is business. In my business, and the business of trading you are either right or wrong. You either have more capital or less of it and that's all that matters. People don't pay me to talk about how I had a good idea but I lost money, I get paid to make them money. That's it.
So in conclusion, I want to say that while I am happy that 2003 is closing out, it is a year that not only will I never forget but also one that quite possibly will be looked back on as one of the defining year's in my life. I hope that this gives you some insight as to who I am and what I deal with so that maybe you understand my ideas and missives better. I welcome 2004 with open arms and I wish the best for each and every Minyan and I have a feeling we will all be getting to know each other better in the coming year.
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