Читать книгу Psychological Analysis - Adam Sarhan - Страница 25

Around the same time, my childhood friend Stephen Klein (my business partner in my candy and fireworks ventures) scored a great six‐figure job working at a huge commodities desk in midtown Manhattan as a futures broker. Within a few weeks, he turned $5,000 of his own personal money into over $100,000. As you would imagine, I told him I wanted in. The timing seemed perfect because Stephen's bosses had realized he was conducting personal trades, and they wanted him to stop and focus his attention on his “day job.”

To get around his bosses, we concocted a plan: I would open an account in my name, he would trade it (the same way he had been trading his account), and we would split everything right down the middle, 50/50. My only problem was that I was wiped out from the dot‐com crash, so to ante up, I had to scrape together some dough. I managed to borrow $5,000 from my father, and then I held my breath and jumped in with both feet. I wish I could tell you that I took that $5,000 and turned it into $5 billion, but this story has a completely different ending.

In an ominous sign of things to come, the day before I opened the account, Klein lost $25,000 of his own money in one day—not fun. Our trading account number ended with the digits “69,” so with all the maturity of a couple of recent college graduates, we dubbed it “the infamous 69 account,” and as a testament to our friendship (considering what was about to occur) we still, every now and then, look back on this adventure and laugh.

We filled out the paperwork (at the time we still had to open accounts with paper), and we funded the account on a cold Monday in January. The plan was that Klein would do everything—buy, sell, handle the position sizing, and so on; he'd make all the decisions. Back then, I didn't have access to real‐time quotes, and I could not log in like today and see my statement in real time. Everything was delayed. Essentially, I was flying blind.

At the end of that first day, I called him to ask how we did. Without skipping a beat, he said it was a good day. I asked him how much we made. A little over $8,000 on a $10,000 account, which he added, constituted an 80% return in just one day. “How much do you think we'll make by the end of the year?” I asked. To this day, I can still hear Stephen's voice in my ear, crackling on the other end of my SprintPCS cell phone. It was one of those pivotal moments in my life—one that you just simply never forget. He responded, very casually: “One million dollars.”

I was overcome with joy. Remember, I started with nothing but an insatiable hunger to learn, and for me, at the time, a million dollars was more money than I could fathom making, and it was all happening without me having to lift a finger.

Blinded by emotion, my naive and flawed logic went something like this: Stephen just turned $5,000 into $100,000. Why wouldn't he be able to do it again and then grow $100,000 into $1,000,000? If he could multiply his portfolio 20‐fold in just a few weeks, why wouldn't he be able to multiply it by a measly 10‐fold in a year?

This, by the way, is dumb money thinking. Anyone who knows anything about trading, risk management, or returns knows that while periods of rapid, exponential growth are not unheard of, in the long term such gains are simply not sustainable. The best traders in the world average 20–30% annual returns; realizing 80% gains in one day is not sustainable. I suspect you've guessed where this story is headed.

On Tuesday, the very next day, the market corrected, we lost all our profit, and we were left with our initial investment: the original $10,000, which included the $5,000 I had borrowed from my father. We both wrote it off as “just a bad day,” and didn't think anything of it. On Wednesday, day three of our misadventure, the market gobbled up our principal. The account was bankrupt. Not only had we lost everything—we had a margin call, which meant we owed the firm money!

Fueled by Klein's early success—the promise of one million dollars resounding in our ears—we decided that our failure was just bad luck, and we kept on trucking. I “borrowed” $5,000 from my credit cards and wired money over on Wednesday afternoon to restore the account before the end of the day. Boom! Just like that, we were back in business!

By Thursday morning, the infamous “69” account had doubled (if we ignored the money we had already lost—which we did), and we now had around $20,000 in liquid cash. I was immediately reminded of the line, “Mortimer, we are back!” from the classic movie Coming to America, which was a reference to the legendary trading movie Trading Places.

By Friday, the account was bankrupt … again! Emotional roller coaster? Sure. Fun? Not really. Devastating? Painful? Borderline soul‐crushing? You bet. Broke and 10 grand in debt, I was forced to shut down the account. Back in the “real world,” I wasn't making any significant money at my “day job,” so it took me what felt like forever to pay back the money I owed. Plus I had to tell my father that I failed, which stung more than losing his money.

As traders, we count our wins and our losses—our “W”s and “L”s. At face value, the infamous 69 account looked and felt like an L, but thankfully, we both turned that experience into a major W. I chalk it up to more “market tuition” because that week's experience was the proverbial seed that was planted that sparked my entire career.