Now about that April Fools' column...
Gosh, I've had so many thoughts on the whole experience, I had to start writing this piece on Saturday. So here goes.
First off, the day was very strange. I logged on about 6 a.m. and already had about 200 emails. After reading through them all, I was pretty disappointed. Most people were already on to me and, shoot, it looked like my joke was going to end up being a big clunker!
But then a strange thing happened. As the day wore on, it appeared fewer and fewer people "got it." The early bird gets the joke? Who knows.
In fact, by late afternoon, the tone had changed from "This is a joke!" to "If this is a joke, you're a jerk!"
So, when I finally stopped checking email at about 9 p.m. that night, the response went from being 98% not being fooled, to probably about 75% being totally reeled in.
So, interesting stats if I were running some kind of psychology test, I suppose, but there was a deeper method to my madness. Or "snarkiness" as one reader called it. Therefore, let me address each group that responded, one by one, because there are lessons to be learned here. Many lessons.
If you count yourself among the group that "got it," good for you! My point: Read everything, and I do mean everything, with at least a hint of skepticism. As an example, I'm very high on Van K. Tharp's recent book,
Trade Your Way to Financial Freedom
. Very nicely done.
The person who wrote the introduction to that book was a very respected trader. A fellow named David Mobley. Ran a hedge fund in Florida. Claimed he made 51% a year on average for his clients. A big proponent of Tharp, and risk control.
Well, it turns out David was running a scam. A big scam. Lied about everything. In fact, he not only didn't make 51% a year, he lost $59 of the $140 million given to him!
Now, is everyone who talks about hedge funds, trading strategies, trading software, or the market, lying to you? No, of course, not. But, damn it, be skeptical: People will gladly take the money of any poor sap who comes along and think nothing of it. They'll lie, cheat, swindle and steal if they have to, instead of working hard. That's life, I'm afraid.
So, whenever you read anything that could affect your money, think twice if that person has a vested interest in helping you, or helping themselves. And for God's sake, think three times on April Fools'!
Now, if you didn't "get it," then you probably fell into one of a few categories...
You felt badly for me, and offered me best wishes, condolences, or, bless your heart, money. To those folks, and they were the great majority, you have good hearts. I'm proud of you. Fooled or not fooled, you should feel good about yourself. If I "ruined your day" as many people said I did, then I feel badly.
Some, of you, though, were incensed, and I mean really irritated, to be so totally taken in.
To those people I ask, "Who are you really mad at? Me ... or yourself for being duped?" If it's the latter, then don't shoot the messenger. But, if it's the former, then please realize my philosophy: Life is not all grinding away at the market every day, worrying about how well or how lousy you're trading. Frankly, if you want just bare nuts and bolts writing about technical analysis, well, you'll just have to look elsewhere because that would bore me to tears.
To those folks who took the opportunity, to say, "You had it coming, you smug SOB. See, told you TA doesn't work," let me tell you a little story.
I was living in Wilton, Conn., a few years ago, which is right near Greenwich, the headquarters of
Long Term Capital Management
, or LTCM. Well, about the time LTCM was going under, and being mauled, and I mean mauled, by the press and pundits, I was working the concession stand at my daughter's school play with the mother of one of the other students. (Sidebar: during this crisis, I was one of the few, very few, journalists to at least empathize with the plight of the LTCM principles. Funny, few people seemed to back me up then...)
We got to talking, and she mentioned that her husband had recently been let go from LTCM, and they'd have to move out of their home, cut back, etc. Really, it was all pretty sad. So, did LTCM have it coming to them? Probably. Did I take up a collection so a multimillionaire wouldn't have to move from his $7 million house to a $5 million house? No. But, there are still real people affected by someone going under. Like families that are innocent bystanders.
So, before you go jumping for glee when someone you don't care for goes down, remember, he or she might be taking down other people. And also remember, that someday you could be in the same boat.
And the Ugly
This leads me to the next group of respondents, and it's these people I want to spend the most time with. This group is summed up with this short email I received from a reader.
"That joke was in very poor taste, given the suffering experienced by many traders lately."
Some even took it a step further, saying my column was akin to laughing at cancer victims or Holocaust deaths.
Well, let me tell you something: As someone who lost his father to cancer and relatives to the Holocaust, I can tell you, you have no freakin' idea what you're talking about. In fact, you're not even close, and here's why:
People who die of cancer or who were killed in the Holocaust didn't sign up for those tragedies. They were innocent victims. But if you were mauled in the market last week, then guess what: that's exactly what you signed up for. Furthermore, if you had been so unfortunate to be playing with stocks like
Protein Design Labs
and using 100% of your margin, then you were doubly signed up!
I mean, as I chastised those readers a few columns back, "what, you thought those stocks only went
in 30-point increments?"
In fact, I'll go you one further. I'm willing to bet if I had written the April 1 column back in March, nary an eyebrow would have been raised. "Oh well, tough luck for Gary. Guess he wasn't smart like I was to ride CRA up 400%!"
No, people who got burned last week fell into one of two camps. Group one was made up of folks who had no idea what they getting into, but were all too happy to enjoy the ride up. Sorry, but those folks got a rude wake-up call, even though I'm willing to bet they read numerous columns where people warned them of the risk and they chose to ignore it.
Group two were people who had a plan and still got mauled. Well, guess what? I got mauled pretty badly in January. But, whose fault was it? Mine. I understood the risks, and I understood that the downside is just part of the game. You want to participate in the upside, then expect the downside every so often, too. You want safe, then go buy savings bonds.
So, feel sorry for those folks? Yeah, I feel sorry for their families. But, you want to play in the big leagues? You want to jump on these roller coaster stocks and then not give it all back? Then exercise some risk control instead of carping about your losses. Unlike cancer or the Holocaust, in the end, everything that happens with your trading is solely your responsibility, and solely your fault.
signed up for this gig, so act like a professional.
A great example is our very own
. Jim, by his own admission, had a pretty dismal '98. And to make matters worse, he got run over by the press and put on public trial for his one off year. But, you know what? I never once heard him whine or cry. Never once heard him say, "please pity me." Shoot, he knew the game. He knew the risks. That's the price of admission, and something many of you need to learn.
Finally, I'm sorry, but I just can't feel badly for folks who lost 30 or 40% last week, but were gleefully talking about how they were up 1000% the year before. Jeez, some of these people are still up 20% for this year! But, you know, maybe I do feel sorry for them. Sorry, that they've gotten so greedy and their expectations are so high, they can't be happy with gains most traders would have cried for only a few years ago!
But Seriously, Folks...
So, what was my point? If my column has ever made you think for one extra nanosecond about your use of margin or the risk you're taking, then mission accomplished! Trust me, it probably took a thunderbolt "going under" column like the one I wrote to wake up a lot of people. And that still didn't get through to some people who never think about their own risk but instead want to blame me if the market goes down further!
So, examine your portfolio, for chrissakes, and know that volatile stocks go up
down! And, please, please -- have a plan to avoid disaster. For those of you who called me "grossly insensitive," believe me, I'm a patsy compared to what a nasty market can bring.
Getting back to my respondents, you had the camp of folks who, well, who knows where they were coming from? A few wanted to get the
Securities and Exchange Commission
after me. OK, but I think they have more pressing issues than April Fools' pranks.
Another threatened to sue me for massive fraud. Hmmm. Well, just let me know how you were harmed, sir, and I'm sure we can settle out of court.
Oh, and more than a few thought I was "abusing the power of the press" and that my column "had no right to appear in a serious financial publication."
To that I say, and I hate to repeat myself, but please, lighten up.
There Are No Generally Accepted Accounting Principles for Taste
Naturally, there were plenty of people who just didn't think the joke was funny.
Well, as they say, there's no accounting for taste. I never "got"
The Three Stooges
, and thought
was idiotic. But, I love David Letterman and Bill Murray always makes me laugh. So, go figure.
And finally, there were a few people who were so incensed, they vowed to stop reading me, end their subscription, and have Cramer fire me (uh, he can't, he's not my boss). Well, you don't need to go to that trouble, though, because I quit. That's it. Adios.
Just kidding. I'll be back Friday, Saturday, Sunday, and every other day, until I pound some of the lessons above into your respective skulls. Now, you may like me less, you may like me more. You may respect me a great deal, or you may have no respect for me at all. Really, it makes no difference to me, as long as I get you to stop, think about your own trading, and realize that the market's not a game where everyone gets a prize.
Now, enough said. Onward.
Gary B. Smith is a freelance writer who trades for his own account from his Maryland home using technical analysis. At time of publication, he held no positions in any securities mentioned in this column, although holdings can change at any time. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Smith writes five technical analysis columns for TheStreet.com each week, including Technician's Take, Charted Territory and TSC Technical Forum. While he cannot provide investment advice or recommendations, he welcomes your feedback at
TheStreet.com has a revenue-sharing relationship with Amazon.com under which it receives a portion of the revenue from Amazon purchases by customers directed there from The Street.com.