Trial By Economic Jury: Are You Innocent Or Guilty?
I sincerely hope you’re like me. Innocent. And that you’ve been waiting for this for a long time. For all these shortsighted, un-learned, debt-loving, over-leveraged individuals and companies to fall flat on their ignorant faces. Because now is the time to celebrate. The party is in full swing. It’s on. You have done your homework and now it’s vacation time. You have learned the lessons from classic books such as Extraordinary Popular Delusions and the Madness of Crowds and The Great Crash. You know that history repeats itself. You know excess leverage causes catastrophes. You cannot wait for the the jury to return their verdict because you know you’re off the hook.
You have what it takes to make it through these “tough times” because you understand the consequences of too much dumb money. Like me, you have been looking forward to this Noah’s Ark-style cleansing for what seems like forever, and you know—or maybe just hope—it won’t be over quickly so you can extract every last ounce of enjoyment. Not because you enjoy seeing others suffer. No. But because your hard work has helped you sidestep the pain and you are proud. Like me, you tried to warn others. To no avail. Like me, you’ve switched your assets into gold, euros and Swiss Francs. Like me, you’ve invested in the most incredible mutual fund for right now, Permanent Portfolio (PRPFX).
To those who are hurting, I feel no compassion. You deserve all your pain. You deserve all your losses. And more. You have not read enough. You have not sacrificed enough. You have not slaved away for years, researching anything and everything financial. You, like most naive Americans, believe making money in the markets is easy. That it can be accomplished solely by patience and perseverance because “investments grow over time.” That it doesn’t take constant monitoring, adjusting and reflection. That it’s a science, not an art. That it doesn’t take every last bit of effort to understand all the variables in play, not just a selective few.
For too long, you have ignored the lessons of the past. For too long, you have ignored the variables working day and night against you. For too long, you have given into blind greed. For too long, you have succumbed to the marketing ploys of “experts”, whose scripts have been written by and firms staffed by those just as—if not moreso—ignorant than you. Just like you, those people wanted to earn money alongside all their friends, without understanding and considering the risks, downside potential and economic cyclicity. Just like you, they believed the US was immune to economic disaster. Just like you, they thought Wall Street was run by intelligent people. For too long, you have gotten away with all of this.
For the past few years, you loved rubbing all the money you were making in my face. For the past few years, you would say, “Why are you still in stocks, don’t you know real estate is the place to be?” and “I’m a trader like you, I just trade houses for bigger gains!” For the past few years, you would ask me, “Why don’t you use leverage, you could borrow a lot off your $1 million, then you could be making the serious money like us!”
Now it’s time you pay for your sins. Now it’s time you learn how dangerous leverage can be. Now it’s time you see just how illiquid real estate can be. Now it’s time you realize how Wall Street works. Now it’s time to attend Economics 101 taught by the professor himself, Mr. Supply and Demand, and his TA, Mr. Margin Call. Now it’s time you sit front and center—unable to doze off—because the presentation is your financial future going up in smoke.
Am I being too harsh? Who cares. I do not matter. I am not the judge or the jury. I am just a spectator. A blogger. I am visiting you in jail. This is your chance to tell the world your story. If you’re lucky, it will become a movie starring George Clooney.
No laughing. No smiling. No jokes. This is no laughing matter. You’re being charged with economic ignorance of the first degree, how do you plead?
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1be-the-ball(TIMBUCKS: $25)
March 7th, 2008 at 3:34 pm
Tim Sykes,
The Jerry Springer of financial commentary.
You don’t have to be outrageous and an ass to be a star. That fame is fleeting.
Take the high road. Your points are good ones but they are lost in your fratboy style.
I am probably wrong, as your last survey did indicate most of your readers are of fratboy age.
2timsykes
March 7th, 2008 at 3:40 pm
ha I dunno man, I just write down everything I’m thinking, I don’t care if I’m a star or not, I will teach people to trade like me and have success doing so
3ethan
March 7th, 2008 at 3:41 pm
Tim, try typing this same manifesto in a few years when you have a wife and two kids, and I am sure it will come out a little differently. Sometimes people need to take on a little debt to support their kids or pay for an emergency. Shit happens. While i really enjoy your love of stocks and your maverick approach to life (ah, to be in my 20’s again!), I think you are missing a key element in your life: compassion.
I’ll keep reading your blog (you’re a smart, witty guy), but I think one day you’ll realize that your missing out on an important piece in the puzzle that is your life.
4be-the-ball(TIMBUCKS: $25)
March 7th, 2008 at 3:44 pm
ethan,
well put, I was going to write similar thoughts.
you do care if you are a star, Tim, and you know it. Don’t demean your readers by denying it.
how does the post above teach people about trading?
5timsykes
March 7th, 2008 at 3:50 pm
I have plenty of compassion, just not for ignorant people. I have no problem with a little debt, but you gotta remember I got a big ass chip on my shoulder thanks to people ripping my short bias strategy. So dont mind me if I take the bitter road every now and then as I prove this strategy is ideal for small investors/traders.
PS To learn how to trade like e, its not just trading strategy posts, its life lesson posts. Who knows, maybe somebody will take all the junk in my head and do something with it that’s much greater than I ever could
6timsykes
March 7th, 2008 at 3:54 pm
And no i never asked to be a star, i just have a big mouth and i’m gonna use it to decimate all the BS out there
7be-the-ball(TIMBUCKS: $25)
March 7th, 2008 at 3:58 pm
OK, I will grant you that ignorant (stupid) people are a pet peeve of mine as well. (That and fat people, but they are so often one and the same)
Who is ripping your short bias strategy? I see very few negative comments here.
Don’t get so jaded by critics that you become a troll like Cramer.
8timsykes
March 7th, 2008 at 4:03 pm
EVERYBODY rips on short selling penny stocks/microcaps. u don’t see their comments here because i prove day in and day out why it does work, buuuuuuuuuuut there’s still very far to go before mainstream acceptance, that will take a while.
the chip on the shoulder works wonders motivation-wise, before i was content taking my little profits, living a nice vacation filled life, but now that i see all these “experts” out there giving BS advice and how all the misinformation has stunted education in this industry, i can’t but help feel its my mission to cut through everything and help people. i’m no saint, i also see opportunity, but the sad reality is that brutal honesty is a revolutionary business model in finance!
9Joseph
March 7th, 2008 at 4:04 pm
I’m watching CNBC. These guys gotta be the most optimistic people I have ever seen. They said it could have been worse. That’s what they said last week and they’re always trying to find a safe sector. Is it me or do you guys notice the same thing?
10MJ
March 7th, 2008 at 4:24 pm
Tim,
You should go ahead and enjoy your success. You deserve the benefits of your labor. Don’t let these haters kill your joy. Keep up the good work. I’m a big fan.
MJ
11mitil
March 7th, 2008 at 4:37 pm
calm down tim don’t be so grumpy…
12lmsmith
March 7th, 2008 at 5:03 pm
Today was the best trading I ever had- how did everyone do??
13CORN Z MASTER SLAYER
March 7th, 2008 at 5:04 pm
5 REASONS TO BUY COIN!!
1. IM STUPID
2.IM PROBABLY YOUNG AND INEXPERIENCED
3. IM GAY
4. IM GAY
5. IM UMMM I FORGOT
14CORN Z MASTER SLAYER
March 7th, 2008 at 5:06 pm
OH AND I FORGOT THE MOST IMPORTANT PART!! THE BARBER NEEDS TO EAT WAGU BEEF TONIGHT AND FINE WINE WITH NICE LADY FRIENDS…
15John
March 7th, 2008 at 6:31 pm
Good for you Tim. Prpfx is a great fund. I’ve had clients in that for awhile now. Check out Bearx too.
16Kevin Watson
March 7th, 2008 at 8:23 pm
Hi Tim,
Everyone has a lessons to learn in the markets, If people lose all there money it is because of greed, hope, fear and ignornace.
Be patieant, don’t get greedy, don’t hope, don’t fear, learn to trade and find a system that suites your own trading style. Cut your losses short and let your winners ride.
It takes years to learn how to trade and profit.
Tough shit, if people are not willing to learn and they lose all there money.
Your a credit to all of us real traders TIM.
17Oliver(TIMBUCKS: $12)
March 7th, 2008 at 11:37 pm
great post tim. this is brutal honesty. i always tell everyone: “im not being mean im being honest. if you dont like my honesty dont hang out with me.”
seems like both of us are left with one question: why is it that people dont like honesty but the BS works out for them?
18gretz
March 8th, 2008 at 1:58 am
No one commented on the Vick cartoon!! Thought it was awesome.
nice “I told you so”
It’s peculiar to see the author call out other speculators.
pot….kettle…black
Karma can be a bitch sometime, huh?
19Vince Parker
March 8th, 2008 at 8:52 am
Tim, as a dad with three kids, I liked your post. The good life and having more than enough all comes down to responsibility and discipline. Smarts is not required but of course helps. There are rich guys with lowly jobs who have exercised fiscal discipline by putting a fraction of their income away and choosing not to have kids until they could afford them.
20Randy
March 8th, 2008 at 10:41 am
Nice blog. I have the feeling you’ll still be trying to turn your $16K into $1M when we’re old and gray. You’re too wise now to do what you did in your heyday, and that market situation of ‘99 - ‘00 will never repeat.
21Randy
March 8th, 2008 at 11:02 am
Oh, and btw, Stimpy is a cat. Ren & Stimpy are in the cartoon.
22Oy Vey
March 8th, 2008 at 11:14 am
Oy vey….never have I seen some much brains with so little heart….let’s dissect…
>”To those who are hurting, I feel no compassion. You deserve all your pain. You deserve all your losses. And more.
My my…ever met any of these people…I have…they aren’t bad folks. Try having a couple of kids, especially if there are issues or the local schools are crap, and see what risks you would take to give them a good life. Besides, the pink slip process isn’t always very rational (one of my friends got laid off after blowing away her ‘07 goals…basically they folded two organizations into one and the senior executive that won already has someone with her specialty).
> You have not read enough. You have not sacrificed enough.
Bullshit…they just haven’t read the correct things. I bet they had a lot more fun the past couple of years than you did.
>You have not slaved away for years, researching anything and everything financial.
No, they were out holding jobs and starting families….two things you have been unable to do thus far. It’s been shown that your kids and the prestige of your job has a significantly higher impact on your personal happiness and social attractiveness than mere wealth….
> You, like most naive Americans, believe making money in the markets is easy.
In the long term, it is.
> That it can be accomplished solely by patience and perseverance because “investments grow over time.”
Because they generally do….compound interest….
> That it doesn’t take constant monitoring, adjusting and reflection.
It doesn’t…(speaking as a long term investory in his 30’s with a good track record). Actually, the more I look at my portfolio the more damage I do to it….(aside from finding places to invest new money or dump a stock that’s way past fair value)
> That it’s a science, not an art.
Trading is a science??? I’d say long term investing is more of a science than trading. A lot more traders blow up than long term investors.
> That it doesn’t take every last bit of effort to understand all the variables in play, not just a selective few.
My…the height of arrogance…a 20 something old claiming to understand all the variables. Kid - I’m a turnaround consultant with a world class finance & operations background, and I don’t claim to understand all the fucking variables in play…even though they regularly line up to take turns banging me in the ass. Have some humility…
Look deep inside your heart and reflect on what you see….
Fear leads to anger. Anger leads to hate. Hate leads to suffering….
23ETQT
March 8th, 2008 at 11:50 am
40% of the readers on this site are apparently college-aged
assuming these people do not have children, a family, and a large account for investing
Tim’s article is well-directed to this audience
24timsykes
March 8th, 2008 at 12:49 pm
Interesting, the majority of commenters bring up jobs and family as excuses, and one guy even looked down on me for not having either! First of all, family, c’mon, I’m 26…and as for job, I’ve never needed to work for anybody else because I’ve always found a way to make my own money, first in the market and now in writing/teaching about the market. Forget about poor writers, I’m on track for a nice little six digit year this year–who knew brutal honesty could be so profitable?
As for the variables, I don’t understand them all–I never will–but just like my trusty chart patterns, when there’s a significant number of them pointing one direction, I believe they help tip the scales a bit so its ignorant to bet when the odds are against you.
Longterm, sure real estate/American, they’ll probly all be fine, but the same is true about somebody who breaks his leg after jumping out of a second story window to get down to the street. Me, I’ll take the elevator.
25mb
March 9th, 2008 at 10:58 am
No one wants to see anyone suffer from losing money, but thats the name of the game.
There is no substitue for knowledge, and prudence. And the majority of americans, and financial institutions have a serious lack of both.
I too am enjoying this collapse, I have no significant debt, and am positioned to make a killing. We will see deflation and a severe recession. But, our gov’mt will succeed in blowing another bubble, as always.
26Lee D
March 10th, 2008 at 10:16 am
Not guilty, on all charges!
http://businessopinions.blogsp.....teeth.html
27PazMartin
March 12th, 2008 at 5:58 pm
Seems like investors need to keep more long-term view to avoid being involved in those problems. It’s easy to forget true market fundamentals. Best long-term growth stocks: electric cars!
28traknologist(TIMBUCKS: $35)
May 14th, 2008 at 8:45 am
Sounds like something cramer said
29traknologist(TIMBUCKS: $35)
May 14th, 2008 at 8:45 am
on t.v.