Kevin Brennan Writes About What It's Like

Risky business

Back in the ‘90s I decided to try my hand at day trading. Stocks. It was all the rage.

I had left my job as managing editor of a cardiology journal to pound out a novel (which became Parts Unknown, ultimately), but I thought I’d better bring some money into the household too, if I could. How hard could day trading be? Unorthodox, for sure, but worth a try.

Little did I know that I was tightrope walking over a chasm filled with fire-breathing sharks and toxic radioactive sludge.

Of course I did my due diligence. I read lots of books on stock trading, especially the almost mystical art of “technical analysis.” That’s the study of charts and the prediction of future behavior of a stock from its current chart pattern. See, when you know what you’re looking at, and you have the right tools, you can reduce the level of risk on the basis of probabilities learned over the years. Men in eyeshades have correlated those chart patterns with outcomes, and all you have to do is find stocks that have the best patterns.

I still have some of the notebooks in which I dutifully scribbled down stock symbols with current and target prices, culled by software I ran every day after the market closed. I had my Datek account ready to rock. And on the first day that I actually pulled the trigger on a trade, I held the stock for all of ten minutes before selling at a profit of $2,000. Say, this was going to be a piece of cake! When my wife got home from work, I said, “Honey, I made $2,000 today!” And she said, “Giddy up, mofo!”

By the time I stopped day trading maybe three years later, it turns out that my first day had been my best day.

Seems the more I learned, the less successful I became. My profitable trades were on the minimalist side, little pots of two and three hundred bucks a couple times a week. My losses tended to be higher because I wasn’t as disciplined on the downside, always thinking this was the bottom. There’s strong support at 23¼ (this was before they moved to cents in the stock market), but I’d turn around and the damn thing would be hitting 22½ five minutes later. My downside stop orders seemed to get filled within minutes of setting them.

This was interfering with my writing. I had no fingernails left. My nerves were shot, and all I thought about was breaking even by the end of the week.

Somehow, though, I made enough in my first couple of years to put together the down payment for our house in Petaluma. And shortly after we moved I decided I had no business in a market where guys like me were minnows getting scooped up by Wall Street pros with their nets and discarded to suffocate on the hot pavement.

Luckily I was out of it for good when the tech bubble burst in 2000. I’d have lost my shirt, my pants, my skivvies, and my dignity. However, briefly in 2008 — just before the real shit hit the fan — I was short Lehman Brothers for a few days as it was starting to sink. Remembering my lack of discipline from the old days, I got out of the trade with maybe a $700 profit, not understanding that Lehman was going to go down to zilch and I could have made ten times that.

I learned from all this that I like a little certainty in my life. That’s why I’m putting everything I’ve got on Trump getting impeached before the end of his first term (odds 4/5 at Ladbrokes)!

14 comments on “Risky business

  1. kingmidget
    March 30, 2017

    I tried to make some part-time bucks as a stock broker/financial advisor in the late 90’s. I didn’t have the money or the stomach to try day trading. Kudos to you for giving it a go and actually making money at it.

    I’ve been in mutual funds for years now, not invested in individual stocks. It’s just easier this way. The friend who manages my small amount of money suggested a few months ago that we start moving some to individual stocks when good opportunities present themselves. His first stock buy was Target, when it took a dip after its most recent quarterly report didn’t come out so well. I agreed to it and almost immediately regretted it. I mean, seriously, who buys bricks and mortar retailers these days? He realized his mistake and sold it a few days later at a small loss.

    We’ll see what he suggests next.

    • Kevin Brennan
      March 30, 2017

      Yeah, I moved to mutual funds after my brief trading stint because I didn’t like that nauseous feeling every day. Now it’s mainly index funds and, at my age, bond funds. It’s nice to sleep at night …

  2. pinklightsabre
    March 30, 2017

    That’s fascinating. And funny, your first day was your best. But good to know it allowed that house down payment, good job.

    • Kevin Brennan
      March 30, 2017

      At least I was able to get out while the gettin’ was good!

  3. Jim Mastro
    March 30, 2017

    Your post brought back memories, but not pleasant ones. I did the day-trading schtick, too, but not as successfully as you. Ended up losing $50K — while the market was going up! If I had just bought and held for a couple of years, I would have made over $1 million. Ouch.

    • Kevin Brennan
      March 30, 2017

      Sorry to hear that, Jim. There were definitely times I was on really thin ice, but luckily my trades were small enough that I didn’t lose large amounts at any one time. Never did the “what would I have made buying and holding” calc because the truth would have stung too much! 😉

  4. John W. Howell
    March 30, 2017

    Buy high sell low is my experience. Good post, Kevin.

    • Kevin Brennan
      March 30, 2017

      I did that plenty of times … Lucky to get out with my skin!

      • John W. Howell
        March 31, 2017

        I used to do the same for houses. I finally figured that one out.

  5. ericjbaker
    March 30, 2017

    I sold some old magazines on eBay and used the money to buy a TV.

  6. Woebegone but Hopeful
    March 31, 2017

    Brave folk.
    The height of my investment markets is buying DC or Marvel graphic novels or boardgames on the guess that they will have increased in value to the benefit the beneficiaries of my will!
    Over here in the UK the bookmakers tend to have a better record than the pollsters at predicting the result.

    • Kevin Brennan
      March 31, 2017

      That’s why I’m keeping my eye on the odds of impeachment. I’d love to make some money on that particular bet …

      • Woebegone but Hopeful
        March 31, 2017

        If you came out ‘in pocket’ you could send ‘him’ a letter of thanks afterwards? 😃

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This entry was posted on March 30, 2017 by in Et alia and tagged .
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