Something caught my eye on Facebook last night that blew my mind and made me write this article tonight. There have been several times on this blog now that I have talked about what trading means to me personally as a career, as well as my thoughts after hearing some of the words and phrases that people come out with when talking about trading “stocks & shares” (same thing peeps).
I’m still relatively new to the industry, with just four years experience in trading; but during this time I have gained a good knowledge-base and skill set that puts me light years ahead of the curve when compared to the uninformed or unsophisticated investor. AKA the general public.
As time goes on, I am becoming increasing frustrated with other people’s’ attitude towards trading and investing. I think as traders we have all met people who think it’s the same as playing poker or betting on horses, who think buying to hold is a consistently profitable strategy, who think that a stock is good value if it’s 5 cents to those who are so sure that they hold 90% losses or even worse buy more down there.
Trading ain’t easy
My biggest and most major grievance though is people who think it’s easy. Share trading is one of the hardest ways to legally make money I can think of. Anyone who thinks otherwise is kidding themselves and I consider it a slap in the face when people say this around me. I’ve busted my balls for four years to get these skills. I can’t begin to count the number of things I have given up in my personal life to get the screen time to increase my understanding of how the markets work.
The people who think it’s easy (And I only have personal experience of UK citizens whose mindset is a lot different from Americans) are the people who “invest” for “however long” it takes. They listen to people who have no idea what they’re talking about and just buy x amount, hoping to make thousands if not millions.
From the outside looking in
It’s delusional and crazy and that frustrates me. But worse, I used to be one of them! You may think I would be upset, but no, I am delighted. I know what I was. I know where I’ve been and I know where I am now and that’s a big deal for any trader who wants to make it.
I don’t feel I was as bad, but I can recall in my early days being lured in by annual reports, tips and hints and holding 50% losers. You name it, I’ve done most! But that’s the learning curve I suppose. The only thing I wish I had back then was somebody just like me now saying “Listen Steve, scrap that UK investment crap, here’s what you need to do to really make a go of this”.
The best decision I made however was to start this blog. When I look back at some of the stuff I came out with in its first three months I never fail to get a laugh. To be able to see my continued development has been an invaluable tool and I strongly recommend any new traders to start a blog. Paper-based journals are too easily discarded and don’t chronicle things that well.
Picture this
OK so imagine you have been trading for four years and you see this status update from a friend;
Jeezo
Before I mention anything else I just want to say that I am pleased that this person is thinking about making money and I commend them for using a public forum to gather information or advice. A lot of people are satisfied to just work 9-5 in a crap job for 40 years so for this person to consider improving their circumstance is worth points.
I will work top-down with my grievances here.
- Grammar aside, they ask if they have shares in any random oil company. No reference to the oil price or if anyone works in the industry. Although they are tied, there are drillers, service companies, refiners and more that make up the sector and these can vary significantly in quality.
- The question is directed to the public, not to a financial adviser.
- The first respondent is doing “alright” from trading. He does not make the investment decision and it is part of his pay packet so is unlikely first to know much about the trading process and secondly is not really in a good position to offer advice. Also, the Aker share price has dropped over 50% in the past 7 months. It’s more likely that he has “options to buy” rather than outright ownership. Aker won’t literally sell themselves short as a contractual perk for this guy.
- We all hear stories about how people have made crazy money. For all we know he might have had 5 million pounds worth of stock which isn’t that great a return. Also years – the price can just as easily go sideways and down for x years so this isn’t a good method of capital allocation for someone who wants to learn how to trade and invest.
- They state that they don’t know anything about it, which is fair enough. But the next line is the worst I’ve ever heard. You don’t really need to know much. Crazy, absolutely crazy. This post would be a novel if I were to sit down and dissect every thought I had about this statement so I’ll leave it up to your fine self to think about that little chestnut.
- The green circled response is my favourite. This person actually works in the industry and has a very sarcastic sense of humour like myself. I feel that he was thinking similar thoughts to mine and his trolling has flown right over the head of everyone else who has commented here (there are another 3 or 4 responses after this pic). Quality satire.
- Another humdinger. I don’t THINK I can go wrong. No research, no trading plan and no knowledge. That is a lethal trifecta in the hands of the inexperienced investor.
If after this you’re up for a laugh, here are two things you can do;
- Think back to the kinds of mistakes you made when you were new to trading
- Try to put yourself back into that mindset. It’s impossible, right?
