What the Dickens do you have to lose?

It was the best of times…It was the worst of times…

The late 1990’s.

The dot com boom was in full swing.

It was the greatest bull market in history.

You remember it well…It changed your life.

You bought AOL, or maybe AOT (Any Old Thing) instead.
And it went up. Your net worth blossomed by tens of thousands.
Perhaps Hundreds of thousands.

You became pretty good at online stock trading.

You either sold at the right time, or you joined the buy and hold crowd. You listened to your broker, to your friend, to the talking heads. You bought into the idea that buy and hold was the way to wealth.

And AOL and AOT would never stop going up. After all, there are billions of people on the planet. Three hundred million in the US alone. Each paying a monthly fee for a service that changed the world. The internet was here to stay, and AOL was the portal.

I still remember sitting at my computer in 1993, having heard so much about Al
Gore’s new invention.

I was involved in my community and we had a challenge
coming our way. We didn’t know how to handle it.

I managed to connect, over an internet bulletin board, with a woman in Michigan whose community had recently met the same challenge. She told me how they did it.
I knew then that the internet would change the world.

But what an awful interface...

And then came AOL. It was obvious to me that this company was the future.

Unfortunately I did not know anything about buying stocks. It wasn’t even a
consideration. It was not something I had ever done, nor considered doing.

I was an entrepreneur. I put all my eggs in one basket, and I watched that basket.

As the 90’s progressed, so did I. Entrepreneurial ventures gave way to charitable endeavors. Volunteering gave way to becoming a professional fundraiser.

I was hired to grow a $28 million endowment. And I did. I raised new funds. We invested those we had. We gave away more than $20 million in grants. And still our endowment grew to over $43 million.

We had donors complaining that our investments only earned 24%! Why were they lagging the market!

I learned about stocks and started my own portfolio. I never did buy AOL, though I have friends who are wealthy from doing just that.

I had a wealthy donor. He made his real money investing in early stage or troubled companies. He was one of the first 200 investors in Genentech, among others.

He gave me a tip. I bought. It went up. My Roth IRA went from $1900 to $12,000. Nice tip. I held. I don’t need to tell you the rest of that story. I held as the dot com boom became the bust. I finally closed the Roth two years ago. It was worth the early withdrawal penalty and taxes on the $57. Now I don't have to look at the statements.

And then a friend told me to read Reminiscences of a Stock Operator.

I learned that there is “nothing new in Wall Street.” That I needed to be careful of “the expensive enemies within,” and the “four deadly enemies: ignorance, greed, fear and hope.”

I lost more than my shirt in the greatest bull market of all time. The dot com bust not only took my money, but my family with it.

But the experience and Reminiscences of a Stock Operator taught me many a lesson.

I read the whole book and re-read it regularly, like all serious traders and professionals do. It reminds me of The Foolishness of Trading on Tips, and The Value of Experience and Memory.

In 1922, Jesse Livingston, the fictional Jesse Livermore, noted that money is not the most important thing you can lose in the market. To a trader, the most important thing he can lose is opportunity. The opportunity to have profited.

What do you need to read?

what lessons do you need to learn?

What work do you need to do to be ready so you don’t lose the opportunity?

Or even worse.

Your family.

Joshua

**************************
Joshua C. Karlin is publisher of Reminiscences of A Stock Operator: Inside Secrets of the Greatest Stock Trader of All Time. Though published in 1922 as fiction, the NY Times reviewed it at the time as non-fiction. This classic text is still studied, by professional traders and those trading stocks online.
The HogsGetFat edition, which makes the timeless wisdom of this classic easier to read, re-read, review, and internalize, will be released on March 7, 2006 at www.HogsGetFat.com

Unique Edition of Reminscences of a Stock Operator to be Published Soon

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Because Reminiscences is a book that great traders have been studying for more than 80 years, my new edition is meant to make its timeless truths easier to read and quicker to review again and again.

To thank you for your help in creating an edition that will be most valued by those of you who are already in the trading community, I am pleased to send you a complimentary copy of my new edition of Dickson G. Watts' rare book, Speculation as a Fine Art, the only book noted or quoted in Reminiscences of a Stock Operator.

Speculation as a Fine Art is a rare manuscript, lost and out of print for more than 80 years from the 1880's until it was republished in the 1960's by Traders Press. Even while wit was out of print, it was still considered one of Wall Street's Bibles!

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Sell What Shows You a Loss & Keep What Shows You a Profit

One of my favorite stories and lessons from Reminiscences of A Stock Operator: Inside Secrets Of The Greatest Stock Trading Genius of All Time.

...My fool efforts to bolster up cotton had increased my line to about one hundred and fifty thousand bales. I may tell you that about this time I was not feeling very well. I don’t say this to furnish an excuse for my blunders, but merely to state a pertinent fact. I remember I went to Bayshore for a rest. While there I did some thinking. .

It seemed to me that my speculative commitments were overlarge. I am not timid as a rule, but I got to feeling nervous and that made me deckle to lighten my load.To do this I must clean up either the cotton or the wheat.

It seems incredible that knowing the game as well as I did and with an experience of twelve or fourteen years of speculating in stocks and commodities I did precisely the wrong thing. .

The cotton showed me a loss and I kept it. The wheat showed me a profit and I sold it out. It was an utterly foolish play, but all I can say in extenuation is that it wasn’t really my deal, but Thomas’. Of all speculative blunders there are few greater than trying to average a losing game. My cotton deal proved it to the hilt a little later. Always sell what shows you a loss and keep what shows you a profit. That was so obviously the wise thing to do and was so well known to me that even now I marvel at myself for doing the reverse.

And so I sold my wheat, deliberately cut short my profit in it. After I got out of it the price went up twenty cents a bushel without stopping. If I had kept it I might have taken a profit of about eight million dollars. And having decided to keep on with the losing proposition I bought more cotton!

Reminiscences of A Stock Operator: Inside Secrets of the Greatest Stock Trading Genius of All Time will soon be republished in an easy to read, easy to review format available for purchase and download at Online Stock Trading website, HogsGetFat.com.


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