Trading perspective from aHedge Fund Manager Part 3/5

MarketAce · #1 (**permalink**) 04-02-2008, 08:01 PM

PART: 3/5

By Kevin Teeple

“Everybody’s got a great plan until the first punch.”

- Mike Tyson

Now for you traders’ out there reading this article, that are feeling your heart rate increase; your blood pressure about to explode, and have veins popping out of your forehead like trend lines on a chart - please hear me out on this; I am not bashing any management style or any trading technique here. As my good friend and professional investor Geoff has reminded me, there is more than one way to skin a cat. Peter Lynch averaged over 20% per year for almost 15yrs using Mutual Funds; Warren Buffett who has averaged over 20%/yr for over 30 yrs using a buy and hold approach, then there's charismatic genius Jim Cramer who changes his mind at the blink of an eye that averaged over 20%/yr at his hedge fund. All of these are Masters without exception or debate, yet they are more the exception, than they are the rule. All I am suggesting here for the rest of us not in the 98th percentile of IQ scores; there might be an easier way, a quantitatively simplistic method to skin that same cat.

“You set enough monkeys typing and one of them will produce the encyclopedia Britannica sooner or later.” - Fooled by Randomness.

After losing that $5,000.00 in less than ten minutes, I’d reached my vomiting threshold and Mrs. Hayes took my silver star back. I could no longer afford to indulge in the fantasy that the stock market actually cared about my trend lines, my market forecasts or stock predictions. Survival dictated no more daydreaming that the stock market would value my technically sophisticated, remarkably ingenious and fundamentally sound trading techniques. I knew what the problem was then, just as most traders and investors do in similar situations. It is the common denominator in all bad trades and investments – the problem was me! It was time for me to take a step back, reevaluate, reassess my life; it was time for me to Walk on Fire!

Those of us whose life’s demanded a change, and we attended a Tony Robbins event already know that above and beyond experiencing the popular picnic skill of walking across a bed of burning coals; that Tony teaches us the vitally more important life strategies, designed to enhance, and accelerate, our personal or professional lives to the next level, no matter how great our lives are already.

Well, after my first fire walking experience with Tony, I kept on walking all the way to San Diego, headquarters of Robbins Research. I left my cubicle commando job and moved there to San Diego to spend three remarkable years working for him.

There are countless great reasons to work with Tony, but one reason that I found to be beyond measure, was participating in the numerous meetings and get togethers’ with Tony. Instead of an audience of say 1000 people or more, he was in a small conference room talking to about twenty of us; and as you can imagine, these experiences ensured that, life would never be the same. Which brings me to my point which is one of Tony’s most powerful organizing principles?

“Know your outcome; Take massive intelligent action; Have sensory-acuity to notice if you are getting the results you desire and if not; change your approach; and then continue to change your approach *until* you get your end outcome.
– Tony Robbins

Hmmm, I suppose in hindsight that Tony felt obligated to hire me due to the fact that I got stuck in his office elevator for over an hour on the way to my first interview. All the same, and years later, I still consider that time at Robbins priceless and paramount to my success today.

Like so many unfortunate traders and investors that I know now, I was so intoxicated with the dream of what might happen in the stock market that I was all but ignoring what was happening in the stock market, as I watched my net worth diminish, one – tick – at – a – time. Do you know any one like this? Maybe intimately?

The time had come to subscribe to Tonys’ organizing principle, and change my approach immediately, and then continue changing it till I reached my goal of making millions in the stock market through identifying a profit pattern in the stock market.

Standing on the shoulders of greatness has made all the difference in my years of trading, especially in the discipline of avoiding that which is inessential and focusing exclusively on that which is essential to profiting in the stock market. “What is true vs. what I think.” Thumb firmly pressed upon the pulse of Wall Street and finance matters everywhere, a lifetime of invaluable investment advice, commanding distinctions and acute market insight can be gained when the Masters share their wisdom with us.

A clever person solves a problem. A wise person avoids it.

– Albert Einstein

One of our first talks went like this… Kevin, let me share something with you that is common knowledge but for the most part is not truly appreciated. The investment community has constructed a widespread and convoluted maze designed to lasso its listeners into its own brand of conventional market wisdom, mostly thru the media, print, and over the internet. Add to this the fact that change is accelerating daily, while increasingly more and more difficult to understand. Even the smartest among us, with our best thinking, can’t figure out how these so-called experts actually arrived at their stock predictions, or market forecasts; not to mention how any of their forecasting translated into actually making money in the stock market?