Now, I understand that you might be skeptical of the statement above. Yet, I ask you to keep an open mind and hold judgment until you finish this book. Just remember, if I was to suggest 500 years ago that the earth was round or that the sun and not the earth was the center of our solar system, I would probably be burned at the stake. As Albert Einstein so famously said “God Does Not Play Dice”, meaning the universe presents us with the perfect order in all things. It is only the stuff that we do not yet understand that is viewed as random or volatile.
By March of 2006 I have made a huge break though in my mathematical work. So much so that I have led myself to believe that I finally broke the “stock market code”. By this point my work was so well researched and accurate that I truly thought that I have figured it out. I was on could 9. Finally, it was my chance to shine. That was the final piece to the puzzle I was searching for. I would be an unstoppable force in financial markets now, it was only a matter of time before I would be a billionaire.
By May of 2006 and after some additional confirmation work I was ready to go. In hindsight, what I did next was beyond idiotic. I threw out my value investing book, I threw out all of my rules and I threw out any type of rational thinking along with it. I was ready to be a trader now. I was going to make a ridiculous amount of money
The next 20-30 trading days were amazing. My work has allowed me to pick 90-95% of significant tops and bottoms with hourly resolution. Meaning I was able to pick almost exact tops and bottoms sometimes in advance and sometimes minutes or so after they have happened. It was a fascinating time and by the time this period ended I have accrued close to $500,000 in profit.
Yet, for some reason that wasn’t enough. I was blinded by greed. I wanted to make more money as I was only 3 years away from being 30 years old. Beaming with confidence and desire to make an obscene amount of money I became even more aggressive and careless. Not only with my own money, but with the money of my clients and other funds I was managing at the time.
In June of 2006, on the day of the FED interest rates decision my work showed a powerful move to the downside. It didn’t matter to me what the decision was, my work clearly indicated a significant move down. Blinded by the accuracy of my work in the past, by the greed running through my blood and by my oversized ego I bet the house on the stupidest trade of my life.
I took all of my money and a large portion of my clients money to buy as many Short Term PUT Options as I could. If my work was to be right I would make a huge amount of money. If it was wrong, well……that was impossible according to my mind. (If you are not familiar, put options allow you to leverage your trade and make or lose a lot more money faster than you would be able to do investing in an underlying security).
I was right about one thing. There was a powerful high energy move that day, but to the upside.
Long story short, I started the day as a self made multi millionaire hedge fund manager and ended it as broke bum. Thus far that day remains the lowest point of my life. It was so bad that I was literally 10 seconds away from blowing my brains out. If you would like to learn more about this experience I suggest you visit my other website, LastSpartan.com and search for the first article on that site titled, I Want To Die Today, I Think I Will Blow My Brains Out.
When the day ended I was broke. Not only financially, but spiritually, mentally and in every other way you can think of. At least for the time being I was finished as an investor. I lost all interest in financial markets. I shut down my fund and returned capital to my investors. They lost very little, if anything. I used my own capital to prevent their losses. I couldn’t stand to even look at financial markets or my research. I was too devastated and mentally destroyed. I put everything away and moved on to the next chapter of my life.
As time went by my thirst for financial markets came back. My pain went away and by mid 2013 I was ready once again.
I am back baby!!!
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