A man who calls himself “Holdtherisk” broached a very interesting subject in the Blogger Network (@ibc_bn). It reminded me of a quote from the late Andrew Carnegie, who incidentally is one of my favorite old school stewards of wealth and wisdom. He said “Concentrate your energies, your thoughts and your capital. The wise man puts all his eggs in one basket and watches the basket.” Carnegie said he borrowed that phrase from another great, Mark Twain. Either way, it’s an interesting subject to talk about, with regards to investment philosophies.
I must say, when I was starting out as a young investor, all I did was swing for the fences. I exhibited ZERO discipline. I was like this guy, but with stocks. At the time, my clients loved me–because I was a fucking genius in a raging bull market. I had no fear and nothing to lose, other than other people’s money. I didn’t quite understand the philosophy behind “managing risk” and my returns reflected that.
Back in 2000, I lost a large 7 figure account. He was a CFO of a publicly traded company and could have been a monster client for me, in terms of gathering referrals. Do you know why he left me?
I made him too much money.
I scared him away with my erratic investment style. This was a man of great deportment and prestige. He didn’t need some young 20 something rolling dice at his behest.
If you’re in the business of managing money for other people, listen to me very carefully. You’re never gonna get big playing bullshit stocks for small rips. You will get pigeon holed as “the crazy, fuck you money” guy and will never earn full trust from your clients. In that regard, Andrew Carnegie was a fucking moron.
However, there is something to be said about self directed investors, willing and able to take risk, trying to make it big. I find nothing wrong with it and encourage you to do so, only if you can afford to lose it all. Over the years, I’ve lost immense amounts of money, gambling in oversized positions or fucking around with options. A few years ago, using The PPT overbought/oversold algorithms, I turned 100k into a million dollars. The next year that money was cut in half, stabilized, then I took it out of the market.
Why did I take the money out?
Well, for me, it was a distraction. My business is to manage money for others, not for myself. The volatility of my casino account became a distraction, so I eliminated it. I still have long term investments; but I am sure none of you are interested in boring stuff like that.
If you understand the risks and have an idea that you are passionate about, I say fuck it–go for it. However, if you are an old, crusty man, with limited resources–I forbid you from gambling like a degenerate OTB guy. As for you pikers trying to make it big in the business, get on the phone, smile and dial, and raise some fucking assets. Quit trying to be Gordon Gekko and get to work.