RevShark's Traditional Thanksgiving Column
by, 11-23-2016 at 11:23 AM (462 Views)
My Story of Gratitude
“Acknowledging the good that you already have in your life is the foundation for all abundance.”
― Eckhart Tolle
I started writing for RealMoney.com a little over 16 years ago. Every year since then I’ve written a column on the day before Thanksgiving about how I became a trader, money manager and writer. I never dreamed my life could have turned out the way it did.
I write this story to remind myself how lucky I’ve been and how much I have to be thankful for but the main reason I write it is that I want you to know that we all have struggles and obstacles to face. No matter how bleak and hopeless your circumstances may seem it is amazing how your life can improve if you stay positive and don’t give up. The biggest obstacles you face are the path to a better life.
I grew up in Bloomfield Hills, Michigan which is affluent suburb of Detroit with many auto executives and excellent schools. I have seven younger siblings and was the prototype oldest child. I played sports, worked many part time jobs but was a lazy and student in high school.
Fortunately I did extremely well on standardized testing. I gained admission to the University of Michigan and eventually earned degrees in both business and law. Prior to law school I had worked for two of the large international CPA firms and was a CPA as well. I was ready to launch my career as a tax and corporate lawyer. I worked hard, made some money and the future looked bright. Then I went deaf.
I don’t mean ‘speak a little louder’ deaf. I mean totally and completely ‘you have to write me a note’ deaf. My Mother was hard of hearing and I had minor hearing loss as a child but due to some genetic quirk my remaining hearing disappeared over the course of about six months I tried hearing aids but they require some residual hearing for amplification to work. I studied lip reading but it isn’t nearly as easy as it looks in the movies.
There isn’t much demand for lawyers that can’t communicate no matter how competent might be. I was forced to give up my law practice, lost everything I owned and was basically dead broke. Luckily I had a disability policy from the State Bar of Michigan and the Social Security deemed me incapable of performing any meaningful job so I had enough income to pay my rent and put some food on the table.
My already shaky marriage had ended and I was alone, depressed and had no clue what I was going to do. I couldn’t qualify for even a menial job as there was no way for me to converse One day while visiting my sister, I started fooling around with a personal computer my brother-in-law had just bought. It looked like a fun toy but it eventually changed my life. New services called Prodigy and CompuServe allowed me to converse without the necessity of hearing.
Eventually, I stumbled across stock market message boards and I was intrigued by the very active trading that the participants were engaged in. I had some minor experience with stocks but these discussions were nothing like the investing I learned about in business school. Aren’t we supposed to use modern portfolio theory, study financial statements and calculate valuations based on discounted cash flows? Apparently not. These folks were gunslingers. They didn’t even know the actual name of some of the stocks they traded but they seemed to make money regardless.
I had a very small amount of money saved that I couldn't afford to lose, but I opened an account with a local broker and started trading a little. It was a disaster. I was burned in some ridiculous small-cap "story" stocks. When I tried conservative big-caps they barely moved. I often read about how Warren Buffett made his billions but that wasn’t going to happen for me very quickly with my small stake.
I flailed about for a while but eventually I started to focus more on understanding emotions and psychology. It dawned on me that the main thing that drove stocks wasn’t their inherent characteristics but the emotions of the people that bought and sold them.
The best way to understand the emotions that were driving stocks was to study charts. What moved a stock in the short term had almost nothing to do with the things I had learned from my finance professor. In fact, he informed us that trading was a useless endeavor due to the efficient market theory. I quickly learned how wrong he was.
I slowly refined my approach and I eventually bought stocks like II-VI Corp. (IIVI) and Wireless Telecom (WTT) that split a number of times and were big winners. It was still hard for me to trade because I couldn't talk on the phone and had to physically visit my broker to place orders, but when online brokers started to appear, I could trade more aggressively. I still recall the first time I bought and sold a stock within the same day. That was quite a victory when dealing with 15-minute quote delays and 28.8 baud modems.
I loved what I was doing. Trading gave me something to do other than dwell on my misery, and I made surprisingly good money. My account not only grew but it multiplied. It was probably a good thing that I was still frightened at the prospect of losing money and not being able to find a job, as it forced me to keep grinding away day after day and not allow losses to build.
I greatly enjoyed digging for new stock picks and sharing them on message boards. I had many battles with the dogmatic founders of Motley Fool, who kept insisting that trading was a waste of time, but they couldn't dispute my success. They even set up an active traders' message board on AOL (AOL) to keep my heresy contained. In the late 1990s, this was the home of many great individual traders who were doing extremely well in an environment that favored a momentum and trend-following approach.
One of the more controversial stocks back then was Iomega. The Motley Fool promoted a buy-and-hold approach to it while Herb Greenberg presciently predicted its doom. I actively traded it, up and down, with great success and did battle with both sides. I insulted Herb constantly over his bearish views, but he is such a pro that he just smiled and even invited me to set up the "Shark Investing" site in conjunction with his "Business Insider" message board on AOL.
Shark Investing was the home of the first real online chat room for traders. Folks would wait for hours each morning to get one of the limited spots. It was an idyllic time for traders as the market climbed higher in the late 1990s and into 2000. I was making more money than I had ever dreamed possible. On the day in early 2000 when I wrote the biggest check I’ve ever written in order to pay my taxes, the bubble burst. Many traders gave back years of profits. Luckily, my fear of never finding a job again served me well and I protected my capital and held on to the bulk of my gains.
My site eventually moved to the Web, where my chat room still operates with many of the original members at SharkInvesting.com. Shortly after 9/11, I talked with Jim Cramer and was surprised to learn that he followed my message board back in the AOL days. He offered me the opportunity to write for Real Money and I've been here ever since.
Trading had transformed my financial life but my personal life took a very positive turn. While visiting my parent’s condominium in Florida I met a smart attractive woman. I was extremely self-conscious about being unable to hear but we developed our own little form of sign language to communicate. We have been married 21 years this week and have three great kids.
Anneliese, Jimmy and Sam are the loves of my life. They are homeschooled and often will pick a stock that they can follow while I trade. Anneliese, who is 15 now, dances and recently was signed by a modeling agency. My two boys are exceptional that enjoy football and baseball. All three play classical piano. Jimmy had the honor of playing at Carnegie Hall a year ago.
Ten years ago, I would not have been able to hear him but medical advances had changed that. New technology has made it possible for me to hear again through a device called a cochlear implant. While my hearing is not perfect, I can now carry on a normal conversation and listen to my children play the piano.
The great irony of my story is that if I hadn't lost my hearing and everything I owned, I would probably never have enjoyed the success that I've had. I never dreamed that anything good would come from such a devastating event.
One of the reasons I like to share my story is to give hope to others who are facing problems and obstacles. Everyone experiences times of hopelessness, but I'm convinced that if you can stay positive and find things in life that you enjoy, it has a miraculous way of working out. If it can happen to me, it can happen to you.
Have a great Thanksgiving.
Jim "RevShark" Deporre