Everybody sooner or later turns out to be a daytrader. Get deep enough into anybody's heart, and you'll find a market call. Psychoanalysts build a false science on the theory that millions of people are maladjusted lovers; a better knowledge of the world would teach that they are maladjusted daytraders.
My younger brother, currently an unemployed Hollywood truck driver, wrote me today asking, "Why are 'calls' selling well in this market? And have we hit the 'bottom' yet? Does the
positive earnings report signify a bottom?" My brother. A few months ago, his emails spoke of movies and
shows. He would say of our father: "no s--t dude, some goofy-ass s--t." Now he's asking about a bulletin-board-listed company based in the Bahamas, traded in Vancouver, offering Internet access in China.
A few years ago, fed up with New York and the 7,322,564 traders there, I brought my fiancee to a little cottage on a lake in Michigan. The nearest big town was Holton, Mich. (pop. 4,251). Turns out my fiancee was a trader. She left. I walked along the shore to a cottage down the lake. Inside my Aunt Mary, a divorced housewife, sat at the kitchen table staring at a graph on her laptop, as the sun set gently over the evergreens across the water. "Cory," she said sweetly, "what do you think about this here
I told her it was a bad trade and put her in
You write a financial story and you have to have numbers. Here they are: Over the past decade, the
Dow Jones Industrials
have risen, on average, 19.79% in the year after a new member of the Johnson family embraces trading.
Johnsons vs. the Dow
*Cory Johnson joins TSC and can no longer trade, due to TSC's disclosure rules.
This bodes well. The Dow is only at 10,974, and the Johnsons' commitment to the market is far from complete. My aunts and uncles are in good health; my brother and I are still unmarried. Twelve of my cousins haven't started trading yet, and their 14 kids have yet to grow into prime trading age. Bullish still, my father is single once again: The human condition dictates a likelihood that he'll remarry a trader -- whether she knows it or not.
"We used to be a nation of savers, but now we're a nation of shareholders," says Philip A. Feigin, executive director of
North American Securities Administrators Association
, or NASAA. "If you haven't traded, there's a notion of shock out there: 'What? You haven't traded today?' It's kind of a lotto mentality. But what idiot would buy a lotto ticket? I mean, I've bought them in the past, of course, but, well ..."
The paradox is that everyone is a trader, and yet no one can trade.
reports that nine out of 10 daytraders lose money. The NASAA did a study showing that 69% of daytrading accounts don't see a profit. My friend Marc Friedfertig, author of
Electronic Day Traders' Secrets
, says born traders are impossible to find. "Most people who set out to do this will fail," he says. "People think they're going to turn on the switch and make money; they're wrong. The skill you can develop, but you have to work at it."
The firms on Wall Street are constantly looking for new traders. "I've spent half of my life interviewing people trying to find good traders or keeping good traders from leaving," says Tim Heekin, head of trading at
Thomas Weisel Partners
. Heekin cut his trading teeth in the early '80s as a clerk on the floor of the
and moved on to a handful of institutional trading desks. "Most people think they can be traders, and they can't. Five out of a hundred could develop into first-team all-American traders, but it takes a good person teaching you and a long time learning the nuts and bolts. I'd rather take somebody really raw, a good athlete, than a daytrader who's been trained the wrong way."
But who needs training when you've got a birthright? All ships rise with this Johnson tide, so why not cast afloat? There's ample room for growth. There are just 45,000 daytraders in the
Electronic Trading Association
. Industry experts put the number of online brokerage accounts at 3 million to 5 million (what's 2 million among family?). There is clearly room to grow.
In his 1973 book
A Random Walk Down Wall Street
, Burton Malkiel, a
economics professor, suggested that in an efficient marketplace, a blindfolded monkey could pick stocks better than a professional trader.
None of my relatives is a monkey. I do not have a monkey. But my girlfriend (a massage therapist, no trader she) has a 5-year-old Weimaraner named
. He has yet to trade, but the impulse clearly lies deep within him. I can see it in the way he watches me. He studies the books I read. He tries to sit on my lap when I'm online. Max barks incessantly and sleeps, best as I can tell, about three hours a night -- much like uber-trader
. Max surely believes he can trade, just as he believes he'll catch that squirrel one day.
I think it's only a matter of time until he is trading. God knows where that will send the Dow.
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