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A Slice of Humble Pie


The only difference between a mistake and lesson is the ability to learn from it.


Sometimes you're gonna be the windshield, other times you'll be the bug. That's the nature of this business--in the immortal words of Henry Hill, once in a while, everyone has gotta take a beating.

Last month, after a particularly strong stretch, we walked through the anatomy of a profitable process. It wasn't a victory lap as much as an assimilation of what was done and how, with an eye towards educating Minyans in a tough tape.

Yesterday, while speaking at The Money Show, I left blind risk on my sheets as a function of my recent stylistic shift.

While it was a conscious decision, it was also a costly one. We strive to see both sides in the 'Ville and as we learn more from our missteps than we do our victories, I would be remiss if I didn't communicate the error in judgment.

The only difference between a mistake and lesson is the ability to learn from it.

With that said and respected, I enter today's session with a handful of upside vehicles (Qualcomm (QCOM), Lowe's (LOW), Intel (INTC), Transocean (RIG), Research in Motion (RIMM), SSO, Target (TGT), USO) and some GLD puts (of which I sold a snivlet when the yellow metal was down $20 yesterday). I also have a fair amount of dry powder and will trade around my bias as a function of time and price.

Please note that this is all within my trading bucket and my long-term account remains 100% cash with an eye towards 25% deployment around S&P 600ish, if and when.

We often talk about discipline over conviction, syncing time horizon and risk profile and operating through the lens of risk management over reward chasing.

The tape played Rick James to my Charlie Murphy yesterday and I won't rationalize my risk. Instead, I'll operate within my comfort zone and "trade to win" rather than trading "not to lose."

Sometimes, however, we will lose--it's the cost of doing business--and that's when we must remind ourselves that good traders know how to make money but great traders know how to take a loss.

That point--that level of acceptable pain--is distinct to each Minyan.

We'll figure it out together on the Buzz & Banter, as we always do, but I would have been remiss to sweep the loss under the rug and pretend it didn't happen. We see that all too often in financial media and we don't hide from our mistakes in the 'Ville, we learn from them.

Good luck today.


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