How did I get into this deal?
It’s funny because, when people ask me how I got into the business I do, and have been since 1993, I don’t have a definitive answer. I originally wanted to be a Navy jet pilot, ended up driving Navy ships instead, got lots of experience managing lots of people, turned up happy for it, and have since flown power planes, sail planes and especially hang gliders. But before fore that, I got out of the Navy, and eventually quite accidentally fell into what I do now and is the source of my income (a business opportunity direct mail card deck, at root — still amazes me and the guy who sent it out is now a long & dear friend).
But now my prime attentions are focussed almost exclusively on this, health & fitness. Why?
I was doin’ good. Having flown the HGs for a number of years and having the income from the business, I embarked on learning to fly tail draggers (nothing like Cessna trikes). I did, but at the same time, being freed from daily management of my business, I decided to learn how to trade options in the markets, full time.
Did that too; two years straight, full time, including getting up at 3am to get a bead on European and Asian markets. In the first eight or so months after learning the basics, doing some "paper trading" and then putting significant dollars into the market, I turned $60,000 into nearly $1/2 million in a matter of months. If you’re interested, my monthly profit reports are in the blog archives, back around 2006, or use the search. I’m not going to link because it’s better you not get seduced by 20-30% compound gains monthly. Really. Stay tuned.
I’m telling you this, because this is what got me here. After that great feat, over months and months, I lost better than $300,000 in a single week. Attention! Sobering, eh? Well, first thought is that I’m still up a decent amount, eh? Calculate yearly gain! But, what if I’m just fooling myself; perhaps this is a prelude to much worse… Then I stumbled onto Nicholas Nassim Taleb, Fooled by Randomness, and then, The Black Swan. I blogged about it (look those up too, if you like). In short, I decided I needed to wind down and do something else.
I could and maybe will, someday, write a whole book about that experience; but, the essential thing is that I came away thinking that I was just lucky. I traded credit spreads, which are like crack. You get money for the trade. The goal is to keep it while risking a 10X loss (depending on the strikes & spread). But, still, money in hand. The truth is that I entered the market at the prime point for that particular options strategy (actually 1-2 year before would have been better — it was a very long run). I could even "roll" trades at a loss over months and months, like doubling down on a bet, and I would eventually win — even rolling losing trades 4-5 months in a row. I was wholly seduced. I was invincible!
I don’t know if it was Taleb or not (I’d like to know), but a few years before I was listening to a guest on Bob Brinker’s Money Talk radio show and he, options expert, said that "many options strategies let you win over a long period of time and then, you lose big." That too kept ringing in my head, throughout.
Yep. And here was the deal for me: after reading Taleb and thinking about my own experience, I could not distinguish between luck & smarts in the market. And if you can’t do that, you have no business fooling around with your nest egg and your wife’s money. So, I wound it down. Now, I just buy a few Spiders (SPY) at selloffs, and I hold. And I do a few ProShares on the S&P too (2x leverage), but very modest.
In the whole process, I got profoundly fat & unhealthy. That’s where you pick up the story I’ve told before. And the rest is happy history, for me. Even in the face of a few unexpected issues with hypothyroid, I was able to figure it out within a few weeks and fix it. Never felt better. Riding sky high, now.
Another important thing. I had already, as I said, blogged about Taleb a few times, and I had previously taken the trouble to look him up, let him know about the blogs, and I got a couple of cordial email responses in return.
So, how do you suppose it looked to me when I discovered my now good friend — who’s willing to wrangle Der Spiegel interviews for me — Art De Vany was a fan & buddy of Taleb, and way at the outset?And, Taleb is now fully in the EvFit / Paleo camp and has impressive results of his own. No coincidence, I think. It was either resign, or have a number of other things finally come together, and then stick with it. I stuck with it. Paleo / EvFit is principles based and can work for every intelligent and health conscious person to get there, eventually.
A small world. I can’t say whether learning of that coincidental connection early on is what kept me on the EvFit / Paleo path, or not, but I would never mind thinking so. Bebe, I dumped all that. I’ll never look back.
Babe I’m Gonna Leave You – Led Zepp
The audio on this one is excellent; astounding, actually. That’s why I picked it above a few live versions from ’69. But if you want to explore…, and I recommend it.