When I started to write this month’s article roughly a week ago, my focus was firmly upon the U.S. broad indices. This should come as no surprise, as I’ve been hitting the issue hard in the last couple newsletters and the weekly blog posts out on Thursdays. And with good reason, given that the indices are seemingly stuck in a tight range… poised for what very much looks like a pretty important resolution workout—an inflection point that could well turn into a long-awaited breakout in either direction… sooner rather than later given the energy building in the coiling action of the past couple months.
Certainly some good meat to chew on, so all was well for me as I had largely finished my piece prior to this past weekend…just the need for some finishing touches and a good edit.
But as is often the case in life, the best laid plan goes askew and suddenly you find yourself walkin along a different path. Although it would be easier and less time consuming to stick with my original plan for this month’s article, upon reflection late this afternoon I realized that there might be a salient lesson to share involving my foibles…or at least a laugh at my expense.
The different path started last week innocently enough, when my Audi went back into the shop for the third time in the past two months…and for the umpteenth time in the past couple years. Ok, full-disclosure—the car has been in for literally dozens of visits beyond those called for under the routine maintenance schedule, not including a two-month stint for repairs related to an accident my “Ex” had in it during the first year I owned it.
Sooooo, at this point I’m gonna go ahead and concede the obvious–I’ve a love/hate relationship with that damn car… and I’ve allowed that dysfunction to blossom into a losing scenario. Yes, I’ve married myself to a losing stock and am hell-bent on trying to prove I’ve been right all along to hold rather than cut a loser and move on to something else. Believe me, those around me have enjoyed telling me time-and-again how misguided I’ve been…grrrrrr
Back to the present and many thousands of dollars later for this go-round, my car remains with Audi. While costly and certainly a thorn in my side, the situation was certainly not something to jump off the cliff over.
But fate has a sense of humor…as well as a keen sense of timing and a new twist in store for me, so it seems. Unbeknownst to me until after having filed a police report late this very morning after walking out to an empty parking space, I found out that the rental/ loaner that Audi had generously arranged for me (with my money) had in fact been towed from my complex Monday evening because it lacked my private parking permit—the very permit safely ensconced in the back window of my car—sitting in the Audi garage.
At that point I had certainly had my fill of surprises and wanted off the path on to which I had veered. Unfortunately, fate had one last card to play and it came in the form of the Rule of Three…there was indeed a third shoe to drop. I actually started the day optimistically due mainly to a favorable real-estate endeavor I had made an offer on first thing in the morning. Later in the afternoon, while standing outside the tow yard and listening to the attendant tell me they can’t release a rental car to anyone but the registered owner, I found out that my “sure thing” deal was suddenly not so sure.
As things stand now, my car remains in the Audi shop were the only thing running is the meter, the loaner is racking up fees (started at $300 but grows by the hour) in the hoosegow until the rental car company figures out what to do and my sweet real-estate deal has apparently gone south, although I can’t be sure because I’m unable to get a call back from my own representative in the deal…Doh!
So, what does this have to do with broad markets that I started out speaking about? Or anything market related, for that matter? Predictably, my answer at this point would normally be “dunno.” But in fact there is a connection which I’m getting to and you might just connect with…a common experience that actually takes a whole lot of
peeps out of the trading business…
Without going into further painful detail, the fact is I’ve broken all kinds of my own hard-learned rules with this car. Today was just the newest chapter, but I managed to make it a page-turner. I plowed forward with a lack of both information and awareness of my actual situation, armed with misguided assumptions and failing to understand I was operating blindly. Worse, as things started to work against me I failed to step back and play safe, as I am generally apt to do.
Any of this sounding familiar????
Fact is that a series of events largely beyond my control or awareness had been set in motion and were going to play out whether I wanted them to do so or not. My rash decisions and assumptions, exacerbated by the wrongheaded belief I could manage or change things through shear will, were conspiring against me to make the situation worse.
Gotta be some takers here…at least one or two trader out there who’ve fallen into this trap…
Throughout all of this, I was letting my anger rise and becoming more emotionally invested than I realized…I was pissed and wanting to take out my frustration and somehow vindicate myself and my actions.
Am I the only one that’s ever gone done this road? As is often the case when we allow ourselves to reach this point, I then doubled down on a losing bet and threw fire on the situatio —threatening the job of the tow company manager, who up to that point had agreed to substantially reduce the tow charge. She then promptly pulled her offer and instead tripled the charge by hitting me with everything she could legally. Certainly goes without saying that my approach was fool hearty and predictably doomed to failure. This was my desperationfueled “all-in” bet that I could make it all right with one action… You know what I’m talking about—the “I’m gonna get it all back with this one trade” approach. Hmmmm….Denial ain’t healthy…or a river runnin through North America…
Bottom line, I made mistakes at every turn and in so doing turned a manageable loss into something far greater…in fact I still don’t know what the final bill is going to be on this whole fiasco.
K, kidding aside, the fact is that nobody starts a day thinking they are gonna blow themselves up! As traders we all assume we are gonna fatten our wallets each day. After we’ve been around the block a time or two, we realize that some days we do and others we don’t, but that over the course of days/weeks/months/years we do fatten those wallets by consistently sticking to our plan, playing probabilities and always remaining disciplined. We learn to steer clear of situations capable of blowing us up…trades that start as manageable losses that inexplicably turn into disasters that imperil our ability to remain flush and in the game.
Cutting to the chase, many that enter trading never create a plan or rules…and they lose quickly. Lots more do establish a plan and rules, but they break them routinely…and they lose. Of the remaining group, some play loose with their rules at times…and they manage to stick around, but never profit to the extent they could. Those that do find themselves successful in this business
do something very unusual—they create a simple plan with simple rules…and they adhere to them!
As for my saga, I’m waiting to hear the damage and hopefully will pick up my car in the next day or so. As for the markets, hopefully we are gonna see that resolution move soon enough…something decisive enough to open this baby up and allow for some serious smack to be made. With the meter running still on both the loaner and the Audi, I’m gonna need it!
Louis Horkan
Editor
Louis entered the biz in the late 80s and spent over a decade working as a trader, instilling him with unique insight into trading and the markets. In 1998 he switched gears to become the group editorial director for a large network of award-winning, trading-focused newsletters. In 2002 he became the founding editor-in-chief for two financial trade magazines—each served approx. 40,000 independent financial advisers nationwide. He’s appeared on business TV, in the business press and on numerous biz-focused radio programs in the past. He writes market commentary and analysis most days and trades on a daily basis.