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Proverbs 13:22

November 21st, 2012

Can an Ungrateful Pinhead Reform?

I had an interesting experience this week.

We have a Messianic Jew in our church. His name is Mike. Great guy. He’s into end-time preparation and firearms. The other day, out of the blue, he started talking to me about trading securities.

I have no idea why he brought it up. He doesn’t know my past. I used to trade, back when the tech bubble was still in effect. It was easy back then. I paid a big percentage of my law school tuition trading, and I got great results. One year I placed many trades, and I only had one loss. I ate $600 on Microsoft, which was no big deal.

No one believes that, including other people who traded during those pleasant times, but it’s true.

I got out of trading right before the bubble popped. I think it was 1998. I saw trouble coming, and I sold out. I never went back. I wanted to make money practicing law, and after 9/11 hit, I thought it was only a matter of time until the Muslim extremists blew up the stock exchange. I didn’t want my money sitting there when it happened. Banks looked much better. If your stock goes to zero after a bomb goes off, you’re dead. If your money is sitting in a bank, nothing happens, OR insurance covers it. And I thought we might be looking at deflation. That was before I fully comprehended the foolishness of Ben Bernanke.

Funny thing; a whole lot of people really ate it right after I got out. People who thought it would never end. People who had no business trading (actually, they thought they were investing). They lost their retirement money. It was awful. I got out at the peak. Again, no one believes that, but it happened.

Anyway, I looked at trading a year or two ago, and it didn’t look good to me. In the old days, stocks were very volatile, and I followed their stories, so I usually had a good idea which ones were going to go up or down in the near term. Also, stocks moved in big increments; this was before decimalization. When I took a new look, for some reason, it seemed to me that the new decimal prices made it harder to make money on day trades. I can’t recall exactly why I believed this. And it seemed like it was hard to find stocks with nice daily swings. I decided to drop it.

Mike started talking to me about trading, and I was very surprised. He said he was making money. Okay, fine. He’s up this month, right? Over the long run, he’ll get wiped out. The Gambler’s Ruin and so on. I asked him the appropriate questions. He has made money consistently, over a period of years. Not weeks or days. He made so much, the IRS tried to annihilate him. Clearly, he is not gambling.

He said he helped someone else get started. Someone at church. This person made a killing…and took it straight to the mall. He didn’t tell me who it was. He didn’t really say “straight to the mall,” but he made it clear the money had been spent, instead of going back into the business. This is not what trading is for. Trading is for accumulating money. You don’t do three trades and run to the store to buy multicolored Dolce & Gabbana crocodile-and-ostrich shoes. It’s a waste of time to show people how to make money, if they don’t manage it once they have it.

For some reason, he wanted to show me what he knew. He doesn’t want to invest for me. He doesn’t want a fee or a commission. He just likes showing people how to trade.

I asked him how much money I would need to play with, in order to make it worth it. I was hoping for a figure below the cost of a house. When he told me it would have to be at least $5,000, I practically wet myself. Who cares if I lose $5,000? For God’s sake; I’d consider that tuition. Nobody who isn’t in a bind should be afraid to risk a sum that small.

Today I downloaded my broker’s newest trading software. It’s very nice. It’s about as nice as the software real traders used fifteen years ago. In some ways, it’s better. Mike is telling me there are superior options, though.

I may get back in the game. If I can do well enough with relatively small sums to keep the bulk of my capital off the table, it’s safe, and it’s a very painless way to make money. If you take $25,000, make $25,000, and then stick the original $25,000 back in your mattress, you’re not betting the farm. Eventually, you should reach a point where you have a nice nest egg which is beyond the reach of market crashes. If an anthrax bomb destroys your trading capital, you’ll still have money to buy food.

This whole business got me thinking about my grandfather. He was a lawyer, and he did very well. He was also a stock market whiz, and he bought a tremendous amount of real estate. He didn’t borrow, and he still ended up with a very nice net worth. His daughters criticized him constantly, calling him cheap and greedy, and when I was a kid, I bought into it. But today I thought about it, and I realized they were very unfair.

My grandfather didn’t blow tons of cash on stupid things, but he never did without. If Granny went to him and said the TV wasn’t working, he told her to go to Lexington and get a new one, and he didn’t give her a price limit. When she wanted to go on vacation, he took her to places like Brazil and Hawaii. He drove a Cadillac, until he got stuck with a car dealership and got Buicks at cost. He had a gold Rolex. He spent a hundred thousand dollars on a bracelet for my grandmother. She had a $25,000 wedding ring. He had a very nice house, which he kept up. He had farms he played with, complete with tractors, hay bailers, cattle, and all the other trappings. When his daughters went to college, he let them use his checking account, and they loaded up on expensive clothes, even selling them to each other when they got bored. He bought three of them new cars when they got married. One married a hopeless alcoholic who could not run a business, and he invested repeatedly in the alcoholic’s car dealership until it went bust and he had to take it over.

That’s not how selfish parents act. I have seen selfish parents at work. A selfish parent will raise hell over private school tuition, while spending freely on hobbies. A selfish parent won’t spend money helping kids explore their talents. A selfish parent won’t pay for broadening family vacations.

Until today, I never realized what a healthy attitude my grandfather had. He liked making money; no doubt about it. But he picked up checks. He gave his grandkids fifty bucks each for Christmas, when fifty bucks was a lot of money. He paid my sister’s high school tuition. He was a generous guy, and we never gave him credit. I don’t want to speak disrespectfully about my mother and my aunts, but honestly, their attitude was a little bit like the Occupy ethos. I shouldn’t have paid any attention. I accepted this stuff when I was young; his selfishness was a settled fact, as far as everyone was concerned. But he was very good to us, and I still benefit from his foresight.

He was conservative, and at least two of his daughters turned out liberal. How about that?

As far as I know, only two of his grandchildren got his knack for trading. I may be the only one, but I believe one of my cousins has done very well. Anyway, I can do it. Maybe I shouldn’t be sitting on my ability. It seems like a silly thing for a Christian to get involved in, but plenty of Christians have been very blessed in various types of business. I can’t help thinking about the parable of the talents. I know the story is symbolic, and it’s not just about money, but it probably applies to money in many cases.

We have to do SOMETHING in order to put food on the table.

I really wonder why Mike started talking to me about this. I believe God has told me a couple of things about my financial future, and I’m wondering if this is part of it. I’m not interested in getting rich, but anything that helps me avoid devoting my life to chasing dollars is a help.

I was very unfair to my grandfather. I was influenced by the disinformation I got from others, but that doesn’t excuse me. As far as I know, I was his favorite grandchild. He could barely stand some of the others, but he used to put me in the truck and drive me all over the place. He used to put me on the fender of his tractor while he mowed his hay. He took me out to shoot rabbits. We used to go for long hikes on his properties. He even bought a pony for the grandkids and said he it would be worth it, as long as I got to ride it once.

I wish he was still here, so I could apologize.

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2 Responses to “Proverbs 13:22”

  1. Jeffro Says:

    He knew.

  2. Heather P Says:

    I love that song, it makes me miss my grand-daddy. Hope you have a Happy Thanksgiving.