***
“Wake up boys,” the pilot said. I slowly rose from my reclined chair and looked out the window. We had arrived home, safe and sound. We were in the hangar again. Parked beside the plane was another limo, which was there to take us home. I looked around at everyone else – they were all still sleeping.
By the fourth limousine ride, the excitement of being in a limo had worn off. It became clear to me why Steve lived so lavishly. He was on a never-ending mission to one-up the last time. When the extravagant becomes ordinary, a person must have to do wilder and crazier things to reach that next level of excitement. For Steve, he had discovered a way to capture those same feelings he once had. By inviting us along, he could catch a glimpse of the same excitement of doing it all for the first time. It never occurred to me how difficult it would be to live a life like that. That might explain why money does not buy a person happiness. I never really understood that until now.
C H A P T E R
T H I R T Y - E I G H T
Back to normal life. I could hardly wait for the exam period of my first year of law school to be over. It was definitely a lot of hard work, a lot of reading, but what made it more difficult was my attention was divided between taking notes and trading stocks.
Now that the summer was just around the corner, I could focus more on making money. While most of the other first year law students would be busy working all summer at various law firms throughout the city, I planned to sit in my housecoat and trade stocks. I had done hundreds of trades over the course of the semester and had gained a lot of really valuable knowledge and experience. With the success of my first few trades that Steve picked for me, and my Vegas earnings, I had been able to continue my winning streak and build up my trading account to around twenty-five thousand dollars. I quickly realized Steve was not trading so much as he was gambling. He would scour the message boards to find out what stocks were being talked about and get in before it was pumped up. I did the same thing at first until I realized the game. If you got in too late, or the pump was ineffective, the stock fizzled, and then it was a mad dash to sell off everything before it bottomed out. Steve enjoyed the rush and could afford to take on these kinds of risks. He had a safety net to catch him if he fell. I did not have the same luxury. I couldn’t afford to gamble with my tuition money, so I came up with a different strategy.
I called my strategy ‘Doggy-doodoo Trading’. It was a combination of swing trading and short selling, although I focused much more heavily on the long side. I even told Steve about it, but he said it was too slow for him. Be that as it may, I was not taking on huge risk. The technique was a holistic approach that begins with sure footing, with the goal to get to another sure-footed spot without stepping in some doggy-doodoo. Regardless of any past success I had, I knew I could always step in some crap if I wasn’t careful or being too fancy.
With each trade, I proceeded with extreme caution. I would examine the entire market to get a sense of the overall sentiment. This required a thorough analysis of individual human psychology and the psychology of crowds. My objective was to predict how people would react to certain news items, then try to stay ahead of the crowds at all times. After I developed a picture in my mind of the market sentiment, I would look at how specific sectors were doing, then break it down into individual companies I had a particular interest in trading.
I used technical and fundamental analyses to determine if my next step would be on solid ground, or doodoo. For instance, just because a company had an upward trending chart pattern, good customer reviews, and solid earnings, it didn’t mean they were a good investment. A company like this might attract an average investor and fill them with false hope, but not me. Sometimes a company like this would rely too heavily on just one of their products. Eventually, a competitor would come out with a better version of the product and make the old product obsolete.
So far, my strategy had paid off. In my first year of trading, I was up one hundred and five percent, crushing the S&P 500 composite index.
The Art of the Hustle Page 52
