What Does $FIT, $DPLO, $ONCE, $BLUE and $THS All Have in Common?

Charlie Munger once said ‘show me where I will die and I will avoid going there.’

No one was more addicted to stocks than I was, dating back to the mid 1990s, trading through the dot com bubble and then subsequent crash. I was young, foolish, and had big dreams of becoming rich. Whatever money I made in business, I plowed it into stocks and leveraged it up. By the time I was 24, I was producing more than a million dollars in gross commission. The market was gangbusters. I had six figures in the market. Clients were volunteering money to me and sending their friends to do the same, until it all came to an abrupt end.

I recall the day I knew the market had changed forever, seeing my money line shrivel away like a piece of paper caught in a fire. I lost nearly my entire net worth back then. I even had to cancel my wedding plans and opt for a much smaller venue, thanks to my idiocy.

I chalked it up to being young and reckless.

But if you’re still doing the same shit now, 20 years later, you have a problem.

The way I view the market is very binary. The economy is slow and it truly does suck. Ergo, any stock you own is subject to sudden and severe downside action, due to earnings shortfalls. You cannot get rich buying and holding any longer, unless you take advantage of two unique circumstances.

Due to the venture capitalist, like Fred Wilson, hogging all the good companies, keeping them private until their valuations runaway to bubble territory, there are hardly any good ipos out there. The ones that do explode to the upside, like SHAK, FEYE, GPRO and TWLO, almost always come crashing down — not before long.

So we’re stuck with whatever is left in the market to make our fortunes. The new supply of stocks are in bubbles. The legacy stocks are subject to a dreadful economy. This leaves us with merely one shot at getting rich in stocks again: buying harrowing declines.

Momentum trades are child’s play and yield little in the way of trying to attain true wealth — unless you’re playing with derivatives.

Had you bought the lows in Feb, you made a fortune. Other than that, you wasted the entire year chasing a dream.

The only sector in the market that offers extreme upside, due to growth, is in biotech. But those are laden with mines and you really need to know your stuff when investing there.

There isn’t a lot of opportunity in the market these days for the buy and hold crowd. You either have to trade quickly, have a great timing algorithm like Exodus, or be blessed with the luck of a leprechaun to beat the odds that are woefully stacked against you now — investing in a rigged and artificial economy in decline.