This market isn’t worth buying.
Any of you fine gents trade during the “Asian Contagion” markets of 1998? I built my business off of that crash. My CEO was running in the halls at 11 am, forcing brokers to cover margin calls right away, instead of the traditional 3 pm deadline. There was a panic in the boardroom, one that I haven’t seen since post 9/11 and 2008.
Stocks just got cheaper and cheaper.
I had just moved firms and only had 1 client, brand new to the business, young and fearless. I called people up and told them to buy internet stocks into the weakness. I was buying BYND in size. Well, “size” then was a minor sub 7 figure position. But it meant a lot to me then. The shares got crushed and I was down to 25% equity on the accounts I assembled.
I stopped going to work because I couldn’t afford the expense of traveling on the subway and eating lunch, as well as dry cleaning. I was washing my shirts in the sink and my wife would iron them at night. That’s how poor I was, unable to pay my bills, living off credit cards.
I got lucky. The market turned because the panic ended. It lasted far longer than anyone expected. BYND went from $8ish to $13 almost overnight. I had small accounts go from $3k to $15k. I was the definition of piker, but tried to change that by building on the momentum the market turn had created.
I’ve told this story here several times over the past 5 years. You know how it ends. I built up a new client base and leveraged myself to the hilt on high beta internet stocks that just worked. The market never looked back and before long I was making over $100k per month.
My life changed, but the good times wouldn’t last very long.
Since I’ve been in this business, the market has melted down on a regular basis. In a way, I am an expert on market crashes and calamities. The one thing that I’ve learned, and could hopefully pass on to some of the younger traders out there, is dislocations tend to last longer than anyone could ever imagine, save Zerohedge. There are significant credit disruptions in the muni and corporate debt markets, as well as government.
Just look at my Risk Appetite Index and cringe, then think, then go home.
Not trying to be snarky, but what was your plan B at the time? Or was this a ‘get rich or die tryin’ 50 cent-esqe escapade?
I was going on job interviews for a salaried job. But I hated the idea of it and it showed during interviews. I wrote about it here, under Fly Stories.
I never got hired and had no choice but to make it work.
where’s the money going??? US dollars?? Usually when risk appetite gets pushed into the OTIS, bonds spike, no?
It’s going into the thin air.
I was wondering what that distinct, yet familiar odor was…
money heaven
Sweet Lord Jehova! That risk index just done a Thelma and Louise.
WIll Smith should have done a movie based on this story instead.
Yep, I was also buying in the Asian Contagion. CIEN at 9 – went to 300. I think the 2000 – 2002 crash was much worse, don’t you?
I was at a diff point then. In 1998, I was desperate, so I felt it more.
In 2000, I had lots of money and could afford to lose.
The 1997-1998 selloffs were wild!!!
2000-2002 was horrid. I think it was worse than 2008 (which was scary but fast). 2000-2002 went from roaring 90’s & 80’s to 9/11 and the accounting problems and more.
Just look at a weekly SPX chart, stuff on this scale takes about 6-8 weeks to bottom.
Steve Leishman said on CNBC the Fed does not like what is happening right now. Just watch one day this summer Ben will come out and statement/POMO the bond bears and we gain 100 SPX points in 2 months
got wiped out in the 2000-2002 free fall..its a long story…but lets just say…I learned “you will never go broke taking a profit” the hard way..
I never liked that advice. I like the advice of not letting a GOOD profit turn into a loss…. but YOU CAN go broke taking a profit if you cut your winners and ride your losers.
The quicker you take profits, the quicker you must take your losses
Mr. Partridge can write about the Asian Contagion as he traded back then, what a story.
2 thing to learn from 1997:
– nothing goes down like Asia (hey hey no sick comments here)
– don’t fuck with Soros, he was young and brave and put that Thai on her knees (hey hey no sick comments here)
But jokes aside one thing I’ve learned when I get that sick feeling in my stomach again I should get out…. for the most part just watching now and not playing much.
My Question, With all the Clams out of the way (Thank You BIS), why aren’t you cruising with me yet in the FAZmobile?
Must read through all your Fly Stories one of these days.
Yes, I did and also traded through the following:
Paul Volker raising rates ’79-81
’87 October Crash
’89 Iran-Iraq war
’92 Kuwait Invasion
’96 Greenspan irrational exuberance speech
2000 dot com bust, etc, etc. etc.
I would like to add the ’63 Kennedy Assassination, however I was busy playing whiffle ball.
I remember the LTCM debacle better. I was driving to work, and was just passing the Princeton YMCA, oddly enough, when it was announced on the radio. I had barely heard of them, but I knew it would be a huge mess. That area has some fine old homes, and ordinarily was a pleasant drive. Not that day.
Sir Fly, your wife is a good woman to help out like that.
Thanks. Mrs fly is the best
What Genius will fail now?
I’m just not seeing capitulation today, at all.
the bond bears are getting greedy….
Thanks for this Fly. Main street media is still blaming Bernanke
Rightfully so.
the funny thing about that 13pt bounce from ws1 is that it doesn’t mean anything at all.
Fly bro, we both know what happens this time of year. So just stay on your cushion, feel? Take a vacation in your yard. Enjoy the summer homie. 🙂 It was a good run, no?
fly,,ever delve into futures trading? do it right and its fast payday
And because I recall the above I dollar cost this AM into GDXJ,GDX, and PAAS. 20-30% bounce coming
Don Señor Fly, in times like this do you buy puts or sell calls on your old man stocks then average down or do you liquidate to cash. Thanks for your insight.
Never worked for another human being in my life, never will!
Impressive. How did you manage to “get your start” into income without building of savings via a job first? Freelancing? Sales?
Or did you just have the right connections?
Started selling stuff to sheep in high school
Had a sizable “wad” by the time I left school
Absurd
STFU
THANK YOU
BANNED!!!!!
abs suh, aktually
then 88, then follow trail.
Trust fund baby?
“pharmaceutical” rep, iykwimaityd
In case you’re wondering, I am not buying into the rally. I have built up a massive position in IMMR and will be satisfied to manage that alone while waiting this out.
I am not sure people really understand how dangerous this environment is.
I do. But I have seen how dangerous this is like forever. Did you see the lack of liquidity in MBS’s today…ugly.
Hmmmmm……. getting something of a bounce here…………..
TLT on the move
Great story!!
¡?? o? ?o s?oo? ?????? s???