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Breakfast with Brodsky


As we prepare to close the books on 2003, which has been the first positive year in three, I get the feeling that when the corks pop tonight the toasts will not be centered around what a fantastic year 2003 was, but rather how we hope 2004 will be more profitable. If one looks at a chart of the S&P from the past year it is easy to think that it was a banner year. The defined bottom in March and the subsequent rally, which has yet to take a breather, would lead people to think that Wall Street must have rung the register for some serious dollars this year. We the traders, investors, PM's, and everyone else who has the pleasure of saying they earn their living on The Street know that couldn't be further from the truth.

Sure there are some people that blew the indices away. But that happens year in and year out, not just in positive returning years! There will always be someone who has a greater return than you, or who did it better, so that is a poor way to benchmark yourself. Set your goals for 2004 this weekend. Lay out what you want to do in the coming year, write it down and get a plan. That way you have a way to measure yourself 365 days from now.

I don't know anything that was ever accomplished without a sound plan. No war was ever won without a battle plan. No team has ever won the Superbowl without a season of good planning. It all starts with the plan. The plan needs to be tweaked and changed as we progress, as the battlefield changes, and as outside factors transform. But it is the plan that allows us to navigate through this and to have something to refer to. It is the plan that is the foundation for a positive year.

So in conclusion I think that 2003 was a wild, psychology-changing year where many people are closing their books with extreme amounts of anxiety. After being trained to sell since 2000, we had a year where the only answer was to buy, and to buy blindly. Will that be the story in 2004? That remains to be seen but it is doubtful in my mind.

Does that mean the bears will finally get their correction? Could be, but I think the bigger story is what will outperform in this new global economy. There will be plenty of opportunities to make money both long and short in 2004, as there is every year. So maybe we didn't return as much as we could have. Maybe we lost money. Maybe a lot of things happened, but it is now 2004.

It is that time of year when we get to "start again." Take advantage of it. Review your trades, your ideas and what you could have done to do it better. I for one will be doing that extensively over the next week. I constantly review my trades and myself, but on a short-term basis. I will be reviewing my performance and myself on a larger scale. Look at the months where you returned your greatest returns and try to figure out what you did to accomplish that.

Happy New Year and I wish all of you, your families and your loved ones a happy and healthy 2004.

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