Getting Introspective: 2001 in Review - TheStreet

Editor's note: Gary B. Smith's column runs exclusively on RealMoney.com; this is a special free look at his column. For a free trial subscription to RealMoney.com, click here. This article was published Jan. 22 on RealMoney.

Ever since I started writing for

TSC

, I've had a yearly tradition of sitting down and penning some thoughts about the past 12 months. These thoughts have always come in the form of an interview, where I take both sides: asking the penetrating questions, while giving equally frank answers.

This year, the tradition continues. In the next few days, instead of charts, you'll learn more about me than you ever wanted to know! Enjoy.

Me:

So, superstar, you look a little tired. Tough '01?

GBS:

A grueling year, yes, and that was even before Sept. 11.

Me:

Hey, it was tough for everyone, but we don't want to hear your wailing. Instead, net it out: What was your return for the year?

GBS:

Fair enough. At the end of the year, my trading account was up 53%.

Me:

Yeah, right. What'd you start with -- $100 and add another $53 to the equation?

GBS:

Well, a bit more than that. And to clarify, the 53% was before taxes, but after commissions and expenses.

New Strategies

Me:

Nice, but let me probe a bit deeper. Was this done using all the trades in "The Chartman's Top Stocks" newsletter? Frankly, some of those picks stunk to high heaven.

GBS:

No, a lot of the gains came from some new strategies I've been playing with. Part of my restriction with the newsletter is that I can't trade the picks until 10:30 a.m. that day. By then, many of the trades aren't at a good purchase or shorting price, so I end up passing until the next day or totally.

Me:

So, what are these "new strategies"? What, you just take Arne Alsin's picks and buy those?

GBS:

I wish I were that smart! No, a lot of what I tried new was bottom-fishing, to be honest. As an example, and at least I have this on record, I was buying at the open on Sept. 21. Most of that was for my wife's longer-term account, but I also picked up some trades for myself.

Me:

So how would you classify that strategy?

GBS:

If I had to name it, I'd call it a blow-off low, or oversold long strategy. Essentially, when a stock has bladed down for more than three or four days in a row, I take a look to see if it's near any kind of support. If so, I might buy with a stop under that support. That worked well the latter part of the year.

Me:

Well, sure, but almost any long strategy worked well then.

GBS:

No doubt, so the important thing was primarily that I was long during a bull run. Frankly, that's the trick 90% of the time anyway.

Me:

Yeah, but you had this great new method. Why not tell folks about it? Or at least the newsletter subscribers?

GBS:

It's just not fully baked. As you said, I was long during a bull run. Big deal. Let's see how I do with that method during a big selloff!

Keys to Success

Me:

OK, different topic. By all accounts -- and I'm skeptical because you've never been audited! -- you appear to be a fairly successful trader. Why do you think you've done as well as you have?

GBS:

There are a lot of reasons, but here's the key: I hate to lose. And by that, I don't mean money. By that I mean, it galls me when I hear of any fund, any manager, any index that outperforms me. So I do my best to beat everybody.

Me:

So, in essence, you walk around with a chip on your shoulder.

GBS:

Uh, yeah. I just hate when someone does better than me, so I constantly work on my own trading to make sure that doesn't happen.

Me:

Right, but it does happen. As I recall, you were whipped by a number of funds in '99 and even a few this past year.

GBS:

True, but I always find a way to rationalize those "losses" away! A good example was that Russian fund that returned far better than I did last year. But, I ask myself, a Russian fund? That has to be a one-in-a-million shot.

Me:

All right, so you have a chip on your shoulder. Do you have something that might actually help the readers?

GBS:

Well, I have a passion for trading. I guess that's the other thing. There are many out there who'd like to trade and who have the desire, but they lack the passion. And there's a difference.

Me:

Huh? What in the heck is the difference?

GBS:

If you have the passion, you're

always

thinking about your trading. You can be having a beer, watching football on Sunday with your buddies, and you're

still

thinking about your trading.

Me:

Well, some would call that a bit obsessive...

GBS:

I guess. I guess it is to a certain extent.

Me:

Along those lines, you write a regular column, you do a newsletter, you do TV, and you trade...

GBS:

And don't forget, I'm also a full-time Mr. Mom.

Me:

Right, so what do you think of yourself as?

GBS:

First and foremost, I think of myself as a dad.

Me:

But, professionally...

GBS:

Professionally, I think of myself as a trader -- a trader who also communicates. But when it's all said and done, I'll always trade.

Me:

That brings up a good point. There are many in the financial industry, yourself included, who seem to do a lot of things. Is that good or bad for a trader?

GBS:

Honestly, that's bad if you want to be the best trader you can be. A great example is the Olympic gold-medalist swimmer, Tom Dolan. Tom often swims with my daughter, and I could see right up front why he was a two-time gold medalist: All he does is swim. My gosh, he's been out of college for years now, and that's all he still does!

Same, by the way, with anyone at the top of his or her profession. Tiger Woods just golfs. Warren Buffett just invests. You don't see Buffett restaurants or Buffett in movies. Shoot, he just does the same darn thing every day.

Me:

So by definition, you're not as good a trader as you could be, right?

GBS:

Yes, but I'm probably happier overall because I can do those other things. But, yes, if I wanted to be truly great, I sure wouldn't be writing, doing TV or all of those other things. A great trader should just trade. It shouldn't be a part-time thing.

Stay tuned for Part 2 of Gary B. Smith's self-interview, which will appear Wednesday, only on RealMoney.com.

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 a daily technical analysis column for RealMoney.com

and produces a daily premium product for TheStreet.com called

The Chartman's Top Stocks. While he cannot provide investment advice or recommendations, he invites you to send your feedback to

Gary B. Smith.