The Winner’s Circle
It’s interesting to me to talk to people about their experience with the stock market. I grew up in a household where the stock market was an abstract concept, My parents both planned on their pensions and social security to carry them through retirement. They never owned stocks and their friends didn’t either. We were part of the 45% of Americans who have not stake in the stock market; it meant nothing to us. We believed only rich people owned stocks.
Sadly, it was not until I was in my 40s that I actually began to pay attention to the stock market. By then we had paid off most of our debts and were saving. It came as a bit of a shock to me that I was now among the 55% of Americans who did own stocks. I certainly didn’t feel rich. We relied on an investment advisor to help us and he bought and sold on our behalf. Four times a year he would show us charts that proved what a terrific job he was doing, compared to the benchmarks that he of course selected. Occasionally we broadly compared notes with friends over dinner or drinks, they too were part of the 55%. Usually, we got the uneasy feeling that we were not doing as well as we thought, but we believed we didn’t really have time to pay attention to it. We trusted our untrustworthy advisor.
After our losses in 2008, I began to manage our investments and sought out other investors to help me learn. I found there were excellent books, You Tube videos and of course the business channels. No one suggested that investing was simple, in fact some people and guides made is sound incredibly complex. Everyone suggested, however, that once you got the hang of it, you would be in the winners circle.
As I began to trade, I sought out other people who invested. I would shyly admit I had started to buy a few stocks, and ask if anyone knew of good ones I should consider. I would get eager suggestions, the vast majority of which came from men. Of course, these men were winning in the market. All the time. I was regaled with stories of the killing they had made on company X or Y. I just listened. I was embarrassed that when I had had winners, I had clearly sold them too early. I already knew that I held my losses too long. Everyone seemed to be better at stocks than I was.
What I came to learn years later is that all stock traders love the winner’s circle. They have stories of the doubles or triples they had had. The stock they bought for a dollar that was now worth one hundred times that. On the business channel, it was all about the winners. It was rare anyone admitted to losing money or recommending a stock that lost money. Even when they admitted to a mistake, it was because they had ‘gotten in too early’ or were ‘waiting for a thesis to play out.’ You rarely heard when they gave up on a trade or sold out of a losing position.
I began to wonder. I was handily beating the indexes, despite my sometime painful losses. Just doing the math, knowing many of them did not post annual gains as high as mine, suggested they must have some losers offsetting all those wonderful wins they talked about. They just weren’t getting a mention. Now when I meet a fellow trader, I try and get them alone and then ask, “What was the worst loss you ever had and what did you learn from it?” These stories are the ones I remember, and the ones I learned the most from. Better than any suggested ‘sure winner’ stock tip.
No one wins all the time in the stock market. Don’t be discouraged by the braggart out there. It is not the winner’s circle all the time, but then again it doesn’t have to be. I do very well even with my losses.
Market Today: Another slow day but again surprised myself by ending the week meeting my weekly goal. The market moved up and down, quad witching meant I could open and close favorites options like Shopify (SHOP) and Moderna (MRNA). We are still flagging for the month but commentary is getting bit more positive. Still in wait and see mode through. I set myself up for Monday with equal amount of calls and puts so I should make money on Monday’s open no matter what.