RevShark's Traditional Thanksgiving Column
Thanksgiving is one of those holidays that is very easy to take for granted. We enjoy some time off from work, have a good meal, watch some sports and visit family and friends. That is usually good enough but I’ve found it useful to spend a little time reflecting on the literal meaning of ‘thanks giving. We have all been blessed in various ways and reflecting on it keeps us humble and helps us appreciate what we have.
I’ve told my story every year on the day before Thanksgiving for 12 years now. It one of those traditions that might seem a bit corny and old fashioned but it is still satisfying and can make you feel good. I hope you don’t mind hearing it again.
Back in the early 1990’s my knowledge of the stock market went no further than ‘buy low and sell high’. I had made a few minor investments with my limited funds but I was busy building a law practice after graduating from the University of Michigan with law and business degrees and becoming a CPA after working with international CPA firm KPMG and Deloitte. I had represented a company that merged with Honeywell and did a lot of tax shelter and real estate limited partnership work. My career was advancing quite nicely until I lost everything.
One day while on the phone with an IRS agent I had to find an excuse to quickly end the call. I couldn’t understand anything she was saying and I was afraid I would mess up the deal I was working on. I had gone deaf and no longer could use a telephone.
I had suffered from some minor hearing loss since childhood due to a genetic quirk of some kind but it was just a minor inconvenience and an occasional source of embarrassment. The problem now was much greater as my deafness had suddenly accelerated and now was having a devastating impact on my ability to function in a normal manner. In a matter of months I was unable to even have a normal conversation and was soon stone deaf. In order to communicate effectively I had to resort to written notes.
I had no choice but to give up my law practice. My few remaining assets dwindled quickly but fortunately I had a disability insurance policy that paid me enough to cover my rent and food. I was recently divorced and was alone, depressed and lost. I had absolutely no idea what I was going to do with my life. I couldn’t even take a menial job if it required some form of verbal communication. The worst thing about being deaf is the isolation that it causes. When you lose connection with people and feel shutoff from the world, the problems you are facing seem insurmountable.
One day I was visiting my sister and started fooling around with a personal computer my brother-in-law had just bought. It looked like a fun toy but it eventually changed my life. New services called Prodigy and Compuserve allowed me to actually talk with people and it was totally irrelevant that I was deaf.
Eventually I stumbled across some stock market message boards and was intrigued by the very active trading that the participants were engaged in. This was nothing like the investing I learned about in business school where you studied financial statements and calculated valuations based on discounted cash flows. This was the Wild West with people moving in and out of stocks that they knew little about.
I had a very small amount of savings that I couldn’t afford to lose but I opened an account with a local broker and started trading a little. At first I was burned in a number of small cap ‘story’ stocks and then I grew bored with some conservative big caps that barely moved. Eventually I started to learn that the key to trading was understanding emotions and psychology and the best way to do that was to study charts. What moved a stock in the short term had almost nothing to do with the things I had learned from my finance professor. In fact he informed us that trading was a useless endeavor due to the efficient market theory. I quickly learned how wrong he was.
I slowly refined my approach and eventually I had some stocks like IIVI and WTT which split a number of times and were big winners. It was still hard for me to trade because I couldn’t talk on the phone and had to physically visit my broker to place orders but eventually online brokers started to open up and I was able to trade even more aggressively.
I absolutely loved what I was doing. Trading gave me something to do other than dwell on my own misery and I was able to make some surprisingly good money. My account had actually begun to multiple. It was probably a good thing that I was still frightened at the prospect of losing money as it forced me to just keep grinding away day after day and to not allow losses to build.
There was nothing I enjoyed more than digging for new ideas and sharing them on the message boards. I had many battles with the dogmatic founders of Motley Fool who kept telling everyone that trading was a waste of time but they couldn’t dispute my success and eventually set up an ‘active traders’ board on American Online in order to contain to me. During the late 1990’s this was the home of many great individual traders and we were doing extremely well in an environment that favored a momentum and trend-following approach.
One of the more controversial stocks back then was Iomega. The Motley Fools promoted a buy-and-hold approach to it while Herb Greenberg presciently predicted its doom. I actively traded it, up and down, with great success and did battle with both sides. I insulted Herb constantly over his bearish views but he is such a pro that he appreciate my views and even invited me to set up the Shark Investing site in conjunction with his Business Insider site on American Online.
The Shark Investing site was the home of the first real online chat room. Traders would wait for hours each morning to get a spot. It was an idyllic time for traders as the market climbed higher in the late 1990’s and into 2000. I was making more money than I ever dreamed of but eventually the bubble burst in early 2000 and many traders gave back years of profits. Luckily my fear of not ever being able to find a job again served me well and I protected my capital and held on to the vast bulk of my gains.
Eventually I moved my web site to the internet where my chatroom still operates with many of the original members at Sharkinvesting.com. Shortly after 9/11 I talked with Jim Cramer and was surprised to learn that he used to follow my message boards back in the old AOL days. He offered me the opportunity to write for RealMoney.com and I’ve been there now for over 12 years.
Not only did trading transform my financial life but my personal life had improved tremendously when I no longer was mired in misery. I had met an attractive, very blonde girl on the beach in Florida and we developed our own little form of sign language so we could communicate. We were married 18 years ago this past week and now have three great children.
What is even more remarkable is that new technology developed which has made it possible for me to hear again. I had cochlear implant surgery and while my hearing is not perfect I can carry on a normal conversation and listen to my children play the piano.
The great irony of my story is that if I hadn’t lost my hearing and everything I owned I would probably never had enjoyed the success in life that I’ve had. I never dreamed that anything good would come from such a devastating event.
One of the reasons I like to share my story is to give hope to others who are facing problems and obstacles. Everyone experiences times of hopelessness but I’m convinced that if you can stay positive and find things in life that you enjoy it has a miraculous way of working out. If it can happen to me, it can happen to you.
Have a great Thanksgiving.
- RevShark