AVOIDING THE PANIC

The ongoing calamity on the Carnival Cruise ship, ironically named “Triumph”, reminds me of an old movie called The Exterminating Angel.

‘People are fighting over food and stuff – that’s a bunch of savages. It’s ridiculous. Carnival has nothing at all in plan in case something like this happens.
source

In the movie, a fine assembly of aristocrats join for dinner–but for reasons unbeknownst to anyone–become “stuck” in a room, unable to leave. Soon enough, they turn into savage animals–killing each other along the way.

I reckon the same thing is occurring on the ship right now. 4,200 people went aboard, hoping for the time of their pathetic lives, only to end up on the receiving end of grave misfortune.

Human nature will never change. We always devolve to the lowest form of depravity, when adversity hits us hard. How many people are killed in nightclub fires– due to trampling and disorderly exits?

Panic is our #1 enemy. It is the very worst characteristic of man. It makes us do things we would never do under normal circumstances. When panic sets in, our brains turn off and we transform into cavemen, cannibals even, fighting for survival like stark raving mad lunatics. Pray tell me, if the majority of man believes in God and the afterlife, why do they become so desperate to save their lives?

Perhaps they are fighting for status quo, in order to see their family grow old, to enjoy the World Series and such.

Nevertheless, CCL is a short. Their accidents have become legendary and is bound to hurt business in the short term. Knowing American ingenuity, they will likely branch out to unsuspecting countries, like Nigeria, and offer cruises to see the Statue of Liberty. I am not touching the stock, either way.

Back to the subject of panic. How many times have you lost money or missed opportunities because you were scared, frightened to lose too much? More often than not, these feelings are a legitimate concern. What you should be asking yourself is “how can I avoid feeling panic in the future?”

The antidote is simple.

Never bet more than you can afford and be somewhat traditional with your allocations. The idea of turning $12k into a million is very nice indeed. But you cannot replicate lightening in a bottle. Anyone who tells you there is a formula for “quick get rich schemes” is simply lying to you for his own benefit.

A few years ago, I turned $100k into a million–but I was jumpstarted by a very large position of mine (FTK) tripling in value. I then proceeded to exercise leverage at 225% to play the ranges, using TNA and TZA as my tools. The PPT was my guide and I was impervious to defeat.

Then I took it to the next level and started to play options in a big way. I’d bet $250k on a single, short term, strategy–using greed as my vice. There was nothing remotely intelligent about this form of trading and eventually led to a 50% drawdown, before I closed out the account to finance the purchase of a new home. I didn’t need that money, per se. But it became a very big distraction for me, so I eliminated the distraction. Very simple.

If you are interested in longevity, especially if you are managing other people’s money, keep your position sizes below 20% and more regularly in the 5-10% range. Own a wide array of industries and never become fascinated with glamorous stories of stock market ascendency.

Like the lottery, only a select few will ever make money that way. The majority of people will lose their entire investment and more: their friends, families and retarded items of value etc.

 

28 Responses to “AVOIDING THE PANIC”

  1. Triumph the Comedic Cruise “for me to poop on”

  2. We have met the Enemy, and he is Us.

  3. I come back after a while and see this amazing post. Fly you haven’t lost your touch. Thank you.

  4. Impressed.There is a human behind that keyboard!! Enjoyable read from a piker.

  5. Smart words. Swinging for the fences. I do it too often. I’ve hit a couple of grand slams but strike out a lot.

    It’s actually not investing or trading. It’s pure gambling.

  6. Fly, what do you think about scalping? Essentially using 50% of your capital on each trade and shooting for a 1% profit. Selling. Then using the other 50% for the same kind of gain?

    Mainly usings ETFs such as TNA or SSO.

    • People do it, but it’s not for me.

      I don’t like it.

    • I prefer a more relaxed approach to investing.

    • I have no idea what Fly would say but it won’t work in the long run.
      You are basically saying that you will be trading intra day and accurately getting the daily trend of the general market correct. The vast majority of the time the market will be trending intra day and you will be chopped to death plus you are competing against the HFT Tradebots.
      Yes, there are days where you get the trend correct but it won’t happen often. This is in addition to the fact that you believe that you are equipped to handle this emotionally (not revenge trade, etc.). Most fail because of this.
      My suggestion would be if you in fact want to do this that you find a couple of sector etfs (SMH,GDX,XLF,etc), and get to know the top 3 or 4 holdings and how they react on a relative basis. Get in and get out and don’t be afraid to short them. Do the occasional swing trade.
      This will be a long educational process.

    • That’s only scalable to a certain point too.

  7. Why are these people pooping in plastic bags and putting it outside their cabin doors?

    For God’s sake! Throw that shit overboard!

  8. Funny that character Raul from The Exterminating Angel is insistent upon human sacrifice.

    Staying true to the name, of course

  9. I found that post inspiring and thoughtful, Mr. Fly. Thanks for taking the time to write.

  10. “I found that post inspiring and thoughtful, Mr. Fly. Thanks for taking the time to write.”

    Ah raw PHUX sakes, man, stop Phukken grovelling, snivelling rat!

  11. “Pray tell me, if the majority of man believes in God and the afterlife, why do they become so desperate to save their lives?”

    God never suggested that we were to stand aside and allow his gift of life to be squandered. I believe that we are endowed by the creator, life. I don’t think that He would expect Man to willingly except death. The instinct of survival is what allowed humanity to grow. God created Man. He also created a means for him to survive.

    Those that are acting like lunatics are certainly not kind as God would have them be. I would be surprised if more than a handful on that boat has prayed.

  12. Luis Buñuel references now??

    You closet culturati, you!

    ;)

    ___________

Comments are closed.
Previous Posts by The Fly

AVOIDING THE PANIC

The ongoing calamity on the Carnival Cruise ship, ironically named “Triumph”, reminds me of an old movie called The Exterminating Angel.

‘People are fighting over food and stuff – that’s a bunch of savages. It’s ridiculous. Carnival has nothing at all in plan in case something like this happens.
source

In the movie, a fine assembly of aristocrats join for dinner–but for reasons unbeknownst to anyone–become “stuck” in a room, unable to leave. Soon enough, they turn into savage animals–killing each other along the way.

I reckon the same thing is occurring on the ship right now. 4,200 people went aboard, hoping for the time of their pathetic lives, only to end up on the receiving end of grave misfortune.

Human nature will never change. We always devolve to the lowest form of depravity, when adversity hits us hard. How many people are killed in nightclub fires– due to trampling and disorderly exits?

Panic is our #1 enemy. It is the very worst characteristic of man. It makes us do things we would never do under normal circumstances. When panic sets in, our brains turn off and we transform into cavemen, cannibals even, fighting for survival like stark raving mad lunatics. Pray tell me, if the majority of man believes in God and the afterlife, why do they become so desperate to save their lives?

Perhaps they are fighting for status quo, in order to see their family grow old, to enjoy the World Series and such.

Nevertheless, CCL is a short. Their accidents have become legendary and is bound to hurt business in the short term. Knowing American ingenuity, they will likely branch out to unsuspecting countries, like Nigeria, and offer cruises to see the Statue of Liberty. I am not touching the stock, either way.

Back to the subject of panic. How many times have you lost money or missed opportunities because you were scared, frightened to lose too much? More often than not, these feelings are a legitimate concern. What you should be asking yourself is “how can I avoid feeling panic in the future?”

The antidote is simple.

Never bet more than you can afford and be somewhat traditional with your allocations. The idea of turning $12k into a million is very nice indeed. But you cannot replicate lightening in a bottle. Anyone who tells you there is a formula for “quick get rich schemes” is simply lying to you for his own benefit.

A few years ago, I turned $100k into a million–but I was jumpstarted by a very large position of mine (FTK) tripling in value. I then proceeded to exercise leverage at 225% to play the ranges, using TNA and TZA as my tools. The PPT was my guide and I was impervious to defeat.

Then I took it to the next level and started to play options in a big way. I’d bet $250k on a single, short term, strategy–using greed as my vice. There was nothing remotely intelligent about this form of trading and eventually led to a 50% drawdown, before I closed out the account to finance the purchase of a new home. I didn’t need that money, per se. But it became a very big distraction for me, so I eliminated the distraction. Very simple.

If you are interested in longevity, especially if you are managing other people’s money, keep your position sizes below 20% and more regularly in the 5-10% range. Own a wide array of industries and never become fascinated with glamorous stories of stock market ascendency.

Like the lottery, only a select few will ever make money that way. The majority of people will lose their entire investment and more: their friends, families and retarded items of value etc.

 

28 Responses to “AVOIDING THE PANIC”

  1. Triumph the Comedic Cruise “for me to poop on”

  2. We have met the Enemy, and he is Us.

  3. I come back after a while and see this amazing post. Fly you haven’t lost your touch. Thank you.

  4. Impressed.There is a human behind that keyboard!! Enjoyable read from a piker.

  5. Smart words. Swinging for the fences. I do it too often. I’ve hit a couple of grand slams but strike out a lot.

    It’s actually not investing or trading. It’s pure gambling.

  6. Fly, what do you think about scalping? Essentially using 50% of your capital on each trade and shooting for a 1% profit. Selling. Then using the other 50% for the same kind of gain?

    Mainly usings ETFs such as TNA or SSO.

    • People do it, but it’s not for me.

      I don’t like it.

    • I prefer a more relaxed approach to investing.

    • I have no idea what Fly would say but it won’t work in the long run.
      You are basically saying that you will be trading intra day and accurately getting the daily trend of the general market correct. The vast majority of the time the market will be trending intra day and you will be chopped to death plus you are competing against the HFT Tradebots.
      Yes, there are days where you get the trend correct but it won’t happen often. This is in addition to the fact that you believe that you are equipped to handle this emotionally (not revenge trade, etc.). Most fail because of this.
      My suggestion would be if you in fact want to do this that you find a couple of sector etfs (SMH,GDX,XLF,etc), and get to know the top 3 or 4 holdings and how they react on a relative basis. Get in and get out and don’t be afraid to short them. Do the occasional swing trade.
      This will be a long educational process.

    • That’s only scalable to a certain point too.

  7. Why are these people pooping in plastic bags and putting it outside their cabin doors?

    For God’s sake! Throw that shit overboard!

  8. Funny that character Raul from The Exterminating Angel is insistent upon human sacrifice.

    Staying true to the name, of course

  9. I found that post inspiring and thoughtful, Mr. Fly. Thanks for taking the time to write.

  10. “I found that post inspiring and thoughtful, Mr. Fly. Thanks for taking the time to write.”

    Ah raw PHUX sakes, man, stop Phukken grovelling, snivelling rat!

  11. “Pray tell me, if the majority of man believes in God and the afterlife, why do they become so desperate to save their lives?”

    God never suggested that we were to stand aside and allow his gift of life to be squandered. I believe that we are endowed by the creator, life. I don’t think that He would expect Man to willingly except death. The instinct of survival is what allowed humanity to grow. God created Man. He also created a means for him to survive.

    Those that are acting like lunatics are certainly not kind as God would have them be. I would be surprised if more than a handful on that boat has prayed.

  12. Luis Buñuel references now??

    You closet culturati, you!

    ;)

    ___________

Comments are closed.