Happy New Year

Posted by Jeff Carter
on January 1st, 2013

I hope you are not too hungover today. Even though it’s just another day, for many, today is a day of rebirth. I find it interesting that just switching the calendar can do that for a mindset.

Fur trading at Fort Nez Percés in 1841. (Photo credit: Wikipedia)

When I first started trading, Pete Mulchrone (PGM) gave me some good advice. He said, when you start trading, it’s all about the days. Each day you total up your profit or loss, and each day you gauge your success or failure around that profit and loss. Then, you switch from days to weeks. Once that happens, it goes from weeks to months, then the whole year.

Eventually, when you get to be a big enough trader, you don’t measure success in years, you look at whole trades. When I was trading actively and putting my balls on the line every day, six or seven trades paid for my whole year. Of course, there were little trades in between the big ones that made money or lost money along the way. Of course, the best years are when all those little trades work, and the big ones too!

As I go out into the real world, I find it’s not at all like the pit. People from the outside see human trading pits as hyper competitive places filled with Type A personalities that eat their young. The reality is that it was the most competitive place on earth, but there was a code of ethics that permeated the place that is unduplicated anywhere else I have been. That allowed people to be innovative, creative, and ironically ethical.

Pit traders are among the smartest people I know. Many of them are out of business today because of changes in the marketplace. But with a little discipline, and some mentorship, they can become tremendous assets to organizations because of the lessons they learned daily in face to face, belly to belly, high intensity, high stakes finance. Find one you can trust and they are worth far more than their weight in gold. Hey, some of us are pretty heavy!

Sometimes, you can get a flavor of that on the internet. There are some people in the Stocktwits network that if you aren’t reading or following you should. They exhibit the character of traders I knew back in the day. Howard Lindzon is one. So is Phil Pearlman. Josh Brown is another. Sean McLaughlin is another, even though he is in Boulder now! I have met them all personally and can vouch for them. When the shit starts flying, you want to be in their foxhole. Others in the network I haven’t met, but have a gut feel for are James Altucher. He seems real to me and honest from all my personal interactions with him. Eddy Elfenbein and Brian Lund too. Stocktwits is full of characters like this, and soon I will be meeting more of them. You can find all of them every day at Abnormal Returns. (the most unvarnished, real aggregator of financial info you will find on the internet)

If there is one thing that I have learned in the last year it’s that you need to have a trusted and valued network to support you when you make certain decisions. Over the course of my career, I have actively tried to build that network. Believe me when I tell you it comes in handy. My 2012 was rough sledding personally. But at the end of the day, I could count on certain people to keep me going. I also met a lot of new people along the way. My network got bigger.

If you are a younger person, learn your craft but really build a lot of connections that can help you. Engage with character and transparency. Don’t build the network to make money for yourself. That is a byproduct of building a good network. Don’t be a climber, or build it because you think that person can get you to the next level-or someone says you should know them. Build a network of people with character, people you like to hang out with, and people that will give you an unvarnished opinion about something.

I am becoming an old fart, but I am still learning new things every day. I hope you had a great 2012, and have a better 2013. Life has it’s ups and downs and things are not going to go smoothly. The United States is about to enter the one of the most challenging times in its history. You are going to need a good network to navigate through it.

God bless you and your family this new year. Remember what Winston Churchill said, “Always keep a bottle of champagne in the refrigerator. In victory you deserve it, in defeat you need it.”

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.