Rocking Wall Street E-Book

Gary Marks

• Herausgeber: John Wiley & Sons
• Kategorie: Fachliteratur
• Sprache: Englisch

Seitenzahl: 264

Veröffentlichungsjahr: 2010

Beschreibung

Praise for Rocking Wall Street ". . . the only four investment strategies you will ever need. . . I dare anyone to read this book and not wake up to the realities of Wall Street, and change their investing habits on the spot." --Steve Trager Watson Retired CEO and CIO of the hedge fund Watson Investment Partners, LP "A true Renaissance man and teacher, Gary Marks adeptly explores four investment strategies that can achieve strong results and peace of mind-two concepts usually considered mutually exclusive in the world of Wall Street investing. Using his vast experience and folksy storytelling, Gary provides lessons, anecdotes, and strategies that will help readers find multiple levels of success." --Mitch Levine Founder and CEO, Enable Capital Management "Rocking Wall Street brings a musician's heart and soul to the investment process, balancing strategic investing with 'living your life.' Marks's creative approach is sure to strike a major chord with both new and seasoned investors." --Kerry Paul Altman, PhD Clinical Psychologist "Rocking Wall Street tips the scales over to the side of the investor and away from the hype masters and media 'experts,' whose lures and promises all seem to vanish in a bear market." --Michael J. Sell Former auditor, CPA, Investment Consultant

Leseprobe

Table of Contents

Title Page

Copyright Page

Dedication

Foreword

Preface

Acknowledgments

Part One - THE EMOTIONAL CONTROLS

Chapter 1 - The Beginning, and the End Game

INSIDE THE BOX WON’T GET YOU THERE

THE CRAFT VERSUS THE ART

THE END GAME

YOU AND TIM

Chapter 2 - Investing for Your Life versus Spending Your Life Investing

WHAT DO YOU REALLY WANT?

COWS

WHAT WOULD ACTUALLY MAKE YOU FEEL RICH?

THE BOTTOM-LINE QUESTION

Chapter 3 - The Power of Hedging Always Hedge Your Bets

HEDGING STEP 1: GIVING UP THE WINDFALL TO AVOID THE BIG FALL

HOW CAN YOU AVOID SERIOUS LOSSES? EMOTIONAL HEDGES

HEDGING STEP 2: DIVERSIFICATION

ENDEAVOR NOT TO INVEST MORE THAN YOU ARE EMOTIONALLY AND FINANCIALLY ABLE TO ...

HEDGING STEP 3: LOGIC OF THE MIND IS NOT THE ONLY KIND

THE GAMBLER’S CATCH-22

Part Two - KNOWING THE DIFFERENCE BETWEEN MARKET STATS AND MARKET HYPE

Chapter 4 - Just the Facts, Ma’am

MARKET FORECASTING AND TIMING

HIGHER RISK TOO OFTEN EQUALS LESS REWARD

WHAT IS TRUE DIVERSIFICATION?

THE TWO GREAT MYTHS OF TRADITIONAL INVESTING

TAX CONFOUNDING: A STORY

CONTRARIAN VIEW OF THE FUTURE OF THE U.S. STOCK MARKET

HEDGE FUNDS: THE DARK SIDE

HEDGE FUND AND MUTUAL FUND TAXES—BUYERS BEWARE

Chapter 5 - Addressing Investors’ Questions from Part One

Chapter 6 - The Right Stuff (and the Wrong Stuff)

VENTURE CAPITAL INVESTING: ZERO IN A MILLION

REAL ESTATE: LIVE IN IT. THE REST IS INVESTING.

TALE OF TWO BUBBLES

THE VIEW FROM A FAMILY OFFICE

WHAT DOES THE FED REALLY WANT?

THE DIARY OF AN INTUITIVE INVESTOR

A THEORY STEPHEN HAWKING HAS YET TO DISCOVER: PARALLEL INVESTMENT UNIVERSES

INVESTMENT GODS SAY: “DO THE RIGHT THING”

Part Three - HEDGING WALL STREET: HEDGED PORTFOLIO CONSTRUCTION

Chapter 7 - Successful Investments: Where Are They?

ARE YOU A CONSERVATIVE INVESTOR OR AN AGGRESSIVE INVESTOR? OH, SHUT UP.

THUMBNAIL SKETCH OF PRUDENT PORTFOLIO CONSTRUCTION

PORTFOLIO 1: FOR FUTURE MILLIONAIRES—DIVERSIFICATION AND DOLLAR COST AVERAGING

BROKERAGE FIRMS, MONEY MANAGEMENT FIRMS, AND FINANCIAL PLANNING FIRMS

INDEX DOLLAR COST AVERAGING: ACCUMULATING WEALTH WITH TIME

PORTFOLIO 2: FOR MILLIONAIRES WHO DO NOT WISH TO BECOME EX-MILLIONAIRES

Chapter 8 - Hedge Fund Mind-Set

ADDRESSING INVESTORS’ QUESTIONS FROM PART TWO

USING ETIQUETTE, RECEIVING RESPECT: THE GENERAL PARTNER/LIMITED PARTNER RELATIONSHIP

Part Four - PLANNING FOR THE FUTURE AND SEEKING THE END GAME

Chapter 9 - The Financial Planning Maze

HOW TO PLAN FOR THE FUTURE: A SIMPLE THREE-STEP PROGRAM

FAMILY BUDGETING: SECURING PRESENT ASSETS WHILE HAVING FUN

SEEING LIFE, BUSINESS, AND INVESTING AS ONE PORTFOLIO

Chapter 10 - The Game Beyond the End Game

DOWNSIZING THE AMERICAN DREAM

RELATIVE DOWNSIZING

INVESTING IN THE TWENTY-FIRST CENTURY

TRANSCENDING THE CENTURIES: WHOM DO YOU SERVE?

Appendix - Specific Due Diligence Notes and Fund of Funds Questionnaire

About the Author

Index

Copyright © 2007 by Gary Marks. All rights reserved.

Published by John Wiley & Sons, Inc., Hoboken, New Jersey. Published simultaneously in Canada.

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Library of Congress Cataloging-in-Publication Data:

Marks, Gary.

Rocking Wall Street : four powerful strategies that will shake up the way you invest, build your wealth, and give you your life back /

Gary Marks.

p. cm.

Includes bibliographical references.

ISBN 978-0-470-12487-1 (cloth)

1. Hedging (Finance). 2. Investments. I. Title.

HG6024.A3M353 2007

332.64’524—dc22 2006034738

To:

Hedge fund manager, Mike Masters.

Stephen Pollan, financial planner and author of the best-selling book, Die Broke.

Bob Dylan, who in the 1960s helped me to think beyond many lies.

John Lennon and Paul McCartney, who first taught me about joy, and the life I wanted to lead.

Foreword

I’ve been very fortunate in my professional life. I’ve traveled around the world and have been able to meet some of the most intelligent and provocative people in the investing arena and other fields. Listening to and in many instances working with these great minds has helped me develop and grow. Occasionally, I feel as if I’m spending too much of my time away from my home and covering too many cities in too few days. Fortunately, my children—or their concerts, ballgames, and return trips home from schools—remind me of what really matters.

That’s why I’m especially pleased to introduce you to Rocking Wall Street by Gary Marks. In the first of what I hope will be an ongoing series of books by people I think have a valuable message, this work offers a unique perspective on the investing game and why too many people play it wrong and end up in financially precarious positions instead of more secure ones.

Gary is a professional money manager. He manages money for other people, especially very affluent individuals. He doesn’t spend his time flying around the world, meeting clients or fund managers. In fact, he hardly travels at all. Gary prefers to stay close to home—Maui—with his wife and three children. Hey, if I lived in Maui, I’m not sure I would ever want to leave either! In fact, a number of years ago, Gary made a conscious decision to change his life. He was living in California and working at warp speed in the investing profession. He was making lots of money for himself and his clients, but he wasn’t particularly happy. With a very supportive wife, he moved to the beautiful state of Hawaii.

There’s more to Gary’s story. He has another profession as well. He spent a number of years touring as a rock/jazz musician. He has recorded 10 albums since the early 1970s, has taught piano, and has written books on piano technique. In Rocking Wall Street, Gary talks about his own life and why he feels that the creative skills he has used in his music help him in his investing strategy. He also explains why he often gives his clients advice that they may not want to hear. Usually, investors want an adviser to tell them how much more money they can make. Gary won’t do that because he views investing as inextricably tied to risk, as well as to other aspects of life. He will tell his clients to put aside money and invest in a secure, low-risk vehicle, rather than trying to hit a grand slam. Why? The market is simply too unpredictable and Gary has seen people lose their businesses, homes, and sometimes their health and their families. He’s baffled by clients who make the same mistakes as gamblers, always assuming that they can beat the house and will manage to outsmart the other players, including adept professionals on the other side of the trade. Unfortunately, gambling and investing are very similar, and that’s why Gary’s unique view deserves to be presented.

Gary questions many individuals and institutions that are part of my daily routine—financial journalists, investment advisers, mutual funds, brokers, and hedge funds. He’s skeptical of the promises, the predictions, and the so-called guarantees that can lull individual investors into making decisions that aren’t right for their particular circumstances. He cautions readers to question everything they hear. There are no guarantees in life, and not even the most educated or most astute investment professional is perfect. Of course, you want to work with a financial professional whom you trust and who you believe has your best interests in mind—whether you have $100,000 to invest or $10,000,000 to invest. But, you always have to be skeptical and do your own research as to their motivations.

Rocking Wall Street offers a fresh perspective for investors. It focuses on how to invest, what to invest in, and how to profit with less risk, and gives away a lot of Gary’s hard-won knowledge about the investing game. But the book also shows that you can make choices about how much time to you spend investing and worrying about your money, where to live, how long to work, what type of job to have, what kind of lifestyle to enjoy, and whatever other values matter to you. That’s one of the key messages of this book. There’s nothing wrong with wanting to accumulate wealth or with making lots and lots of money; however, your investing strategy shouldn’t simply focus on the money itself—but on what it allows you to do with the rest of your life.

John Mauldin November 2006

Preface

Safe and successful are two words that should never be separated when considering how to invest your money. You will be able to understand how to make successful as well as safe choices by following these four key investing strategies:

1. The Emotional Controls

How to hedge your emotions as well as your investments.

2. Knowing the Difference between Market Stats and Market Hype

There are market statistics, and then there are statistics that are neatly packaged to market you.

Being able to tell the difference between the two is a key element to successful investing.

3. Hedging Wall Street: Hedged Portfolio Construction

How and why we should make hedging techniques the rule, not the exception, in our investment portfolios.

4. Planning for the Future and Seeking the End Game

See your portfolio of assets, your career, and your personal life as one inseparable investment.

Rocking Wall Street is my attempt to:

• Help you find the kinds of risk-averse profits that most investors think happen only in fairytales.

• Help you gain peace and freedom inside the investing process so that you can learn to leave this place of investing often and live a happy life back on the outside—because spending too much time thinking about your money is a terrible waste of the money.

• Rock Wall Street to the core so that the hype that is so often perpetrated upon the average investor does not ruin the lives of investors like you in the future.

Acknowledgments

Thanks to:

John Mauldin, of Millennium Wave Investing, author of the best-selling books Bull’s Eye Investing and Just One Thing.

My financial partner, Geoff Gotsch.

My investing teams.

My clients, friends, and partners, from whom I have learned so much.

Denzyl Feigelson, who first suggested I write this book.

Dean and Cheryl Radetsky for their unwavering support.

Amma (The Hugging Saint) for the simple truth.

Special thanks to my wonderful wife, Theresa, and the three very best kids in the world.

Advertising signs that con youInto thinking you’re the oneThat can do what’s never been doneThat can win what’s never been wonMeantime life outside goes onAll around you.

—“It’s All Right Ma, I’m Only Bleeding,” by Bob Dylan, from Highway 61 Revisited1

Playing with the stock market is like playingchicken with a freight train... no matterhow many times you win, you only get tolose once.

—Mike Masters, hedge fund manager

Part One

THE EMOTIONAL CONTROLS

1

The Beginning, and the End Game

Although this book is filled with investing and financial advice for readers of virtually all economic backgrounds and circumstances, it specifically addresses the concerns and questions of those who are, or who aspire to be, high net worth investors (legally defined as those with a net worth of $1.5 million or more).

We are going to explore four strategies that could change the way you approach your investment process forever—both before and after you qualify as a high net worth investor.

I will give you specific tools for immediate success that can work under all kinds of market conditions. But we are also going to explore key issues not directly related to the investing of the money itself.

For instance, after you are making a lot of money and are by all normal social definitions considered successful—how do you get your life back?

I have met investors in their sixties who have hundreds of millions of dollars and no heirs, who oversee their investments 8 to 12 hours a day, 5 to 6 days a week.

I asked one such individual, “Why don’t you just drop everything and go off to Paris for a week?” He responded, “I was in Paris just last month meeting with two of my managers.”

What I really wanted to say was: “When does the money wheel stop and life begin?”

If you are an active investor—someone who pays attention to your investments more than once a week (and you’re not a licensed professional)—you may be heading down the same road—where accumulating money becomes the main goal, all failures are toxic to your ego, and your life has been kidnapped by the game.

The question then is: How do you strike a balance between finding time for your family, your friends, and your inner life, while also making savvy and safe investment and business choices?

Creating free time is of incalculable value. All successful high-level executives (defined as those who can hire staff at will) must learn how to delegate a high percentage of their work responsibilities until they reach a level of free time that allows them to think and dream, rather than just respond to daily crises as they arise. Investors need similar amounts of free time away from the trading and research to assess the big picture.

When this free time is available, you may also come to ask questions that are not just investing or business-related, such as what is the meaning of all this work and free time?

Reading this book—and putting into practice the specific strategies I discuss—will give you investing tools to last a lifetime. It will also greatly decrease the time you have to spend worrying about your investments or about every sharp turn in the market.

We will talk about:

How to profitandprotect your assets from serious losses at the same time.

How to steer clear of market hype and avoid the big mistakes.

How to plan for your future.

What it truly means to be rich.

If you have ever felt overwhelmed or downright emotionally kidnapped by the investing game, I will also attempt to give you your life back! In fact, since I value your time as a reader, let’s settle for nothing less.

These first two chapters will have a distinctly personal spin to them—the real story, “About the Author,” to help set an emotional backdrop to the more technical discussions to follow.

INSIDE THE BOX WON’T GET YOU THERE

I am often asked, how did a professional rock songwriter living in Maui become a big-time player in the hedge fund business?

Fifteen years ago I was playing concerts with my band in San Francisco, had a publishing deal with Famous Music/Paramount, was finishing my seventh recording of original music, and was teaching the Gary Marks Piano Method—“Learn chords, scales, and how to play songs without reading notation . . . .”

To this day I don’t own a suit; I would never wear a tie. I go to the beach most days with my surfer and kayaking friends, while also researching hedge fund managers, co-guiding the investment portfolios of a number of funds of funds, and keeping my investment teams happy, organized, and motivated.

You may think being a rock songwriter, a self-proclaimed beach bum, and the portfolio manager of more than a handful of funds of funds is an odd mix. And admittedly it is. But I also found that these separate worlds could actually create a synergy.

What happened to me at first was relatively simple: When I had made enough money in the music world to consider the idea of investing, I realized very quickly that I wouldn’t be able to handle the volatility and uncertainty that average investors typically endure. I read about the history of stock markets throughout the twentieth century, I studied the concept of diversified portfolios, and became even more ill at ease with the traditional investing process as defined by the marketing campaigns that most brokers and advisers use.

My continuing investigation eventually pushed me into considering the world of hedge funds.

I asked a friend who was invested in hedge funds exactly how he would define one. He said, “A hedge fund is either a really stupid or a really brilliant person who has started a limited partnership, and has found either a really stupid or a really brilliant strategy to invest other people’s money in. You just have to figure out who the really brilliant ones with the really brilliant strategies are, and avoid the stupid ones with the stupid strategies. And poof, you’re rich!”

After many years of research, I began to get an inkling of how to tell the difference between stupid and brilliant (and occasionally fraudulent) managers, but the process was considerably longer and more complex than my friend had let on. In fact, just initializing an investment in a single hedge fund now takes a team of due diligence experts a number of months, including gathering background checks on the major principals, and a lot more.

Meanwhile, the lure of the 1990s stock market also led me to day trading. I had some victories, some defeats. Overall I was making a lot of money. But in the end, I felt like life was passing me by, my musical life was fading away, my family was being ignored, and even the big financial victories weren’t fulfilling after a while.

This is the odd thing about the investing game (and gambling): If you play it all the time, when you win, it’s a pretty good feeling. And you look ahead excitedly to the next challenge or the next bet. When you lose, it’s a horrible feeling. You feel like a fool, a sucker, a failure. If the losses are big you want to hide away or run away. You can’t enjoy your family or look them in the eyes.

This is not what I call a good emotional trade-off.

Sometime after I stopped day trading I started my own alternative asset management company with $4 million under management. (My friends had been seeking financial advice from me for years since I seemed to have some kind of a knack for it. I passed the Series 7 exam and began a fund of hedge funds.) I decided to hedge our risks every way I could and not aim for the moon. After you’ve been studying the investing game for a while, you learn that the moon is a moving target, and unless you’re an astronaut with a very good team back in Houston, the odds are very low that you will ever hit it, except by accident.

In the first seven years, the company grew to over $250 million of assets under management. To this day I run the company from home on my laptop computer. I have never had an office outside the house. That’s because I like working with my kids running around the room, sitting on my lap, and playing my guitars while I’m on the phone. . . . You get the picture. I enjoy creative chaos. Another advantage I had: My family does not watch television. We’re not connected to the world of cable. So I had the advantage of not watching CNBC and all the other financial media shows. All the while I was writing more songs, making more CDs . . . and having more kids.

A few years ago, a potential investor called me and said he was considering investing $10 million with my firm and wanted me to come to New York to meet him. It was a lot of money and I was quite excited. But I told him I was living in Maui and not interested in flying to New York for a business meeting. He offered to pay the plane fare, but I simply repeated, “I’m in Maui. Why would I come to New York?”

I offered to fly him to Maui instead, but I told him to dress very casually—shorts and a T-shirt would suffice. We then started talking about Maui and how beautiful the beaches were. He told me New York was a grind. He didn’t really want to be there anymore. I told him he could afford to live anywhere, but he said his business was there and he couldn’t leave. I wondered why he wouldn’t just move his business to where he wanted to live. After all, he was personally worth tens of millions of dollars. He could afford to do that for himself. But I left that question for another day. We kept talking about personal things. We discovered we each had a young son, and agreed that fatherhood was the most amazing thing that had ever happened to either of us. I also told him about my music.

After the call he went to my web site and listened to my songs.

A month later he decided to invest without meeting me in person. He gained the final level of comfort he needed without me having to travel to New York. He told me, “It’s odd but true that if you had actually been willing to fly six thousand miles just to meet me, and had shown up with a briefcase and a black suit and told me you had a degree in economics from Harvard, I would have been far more skeptical and more on guard about you and your abilities than I am now.”

He added, “Economists rarely know how to make money, anyway. You don’t learn that kind of thing from books; you learn it from street smarts.”

This is a great paradox, and one that is often true about investing, art, or the best-laid retirement plans of financial advisers: The more “inside the box” things are, the more probable it is that the idea will fail.

The specific financial advice I offer in this book is admittedly outside the box. But ask yourself where the typical investing process offered by brokers and financial advisers gets you when you have to make it through bear market cycles like the one that started in the beginning of the twenty-first century? Their ideas and retirement plans were so 1990s.

The 1990s, specifically 1995-1999, were a fabulous aberration. Those who saw this period as a once-in-a-lifetime gift from the market gods kept their profits. Those who thought they learned about investing from experiencing that single decade were set up to be tarred and feathered soon thereafter, and ended up losing vast sums of money in just a few short, painful years. And of course volatile bear markets in all asset classes—real estate, equities, bonds, gold, oil—are just a natural part of the investing landscape.

How can we prevent truly devastating losses from happening to us next time, or the time after that? How can we prevent ourselves from being misled by our market instincts, market gurus on TV, carefully preened market statistics, newsletters, or well-meaning advisers?

The following chapters will attempt to free you from many of the deadly illusions presented as fact by traditional brokers, financial advisors, and so-called market experts, so that you can profit with far less risk than you may have previously considered possible.

THE CRAFT VERSUS THE ART

I started learning guitar at the age of 16. Within a few years I found myself singing my songs in front of, at times, some very large crowds. In my early twenties I was approached by a well-known music manager. He was the manager of a number of jazz greats, and was considering branching out into pop and rock, which was where I fit into his picture.

One day I played him a new song I had written. He looked at me for a while, nodding his head, and then said: “You’re a very good songwriter. But if you are going to be successful in this business you have to learn the craft as well as the art. You’ll need to become a great craftsman. Or we’ll both fail.”

I asked him the difference between artist and craftsman. He said: “An artist is an idea person, a visionary. They create something from nothing. A craftsman makes those things accessible to the world, and understands how to detail out the dream. So, for instance, you write great songs and lyrics out of thin air. But a craftsman knows how to pick the right microphone to use in the studio, how to rehearse a band, how to read a contract with his attorney, and how to make good use of the mixing gear in the studio. If he’s a lyricist he’ll read a thousand books to study the crafts of prose and poetry. A musician-craftsman has a vision of what direction his career is going, beyond just aiming for ‘success.’ Success in this business sometimes only means you are controlled by the ones who control the money. The craft of this business is to understand how you stay in control, rather than just becoming a glorified vacuum cleaner salesman, traveling around from town to town, working for the firm.”

I relay this to you now because investing, business, and personal finance each have the same divisions between art and craft.

You may be a visionary inventor and create something never seen before, but not know how to run a business.

You may be a brilliant entrepreneur, but not be skilled at investing. In fact, this is typically the case.

Or, you may be an investor with good instincts about the art of investing, but you do not have enough institutional support or inside knowledge about how the game really works to make those instincts pay off.

The craft inside the investing game consists of various skills, such as knowing the difference between truly relevant market research and media noise or marketing hype; developing a sophisticated level of due diligence; and devising a systematic investing approach that bypasses typical emotional responses.

Only when you begin to master these crafts can you allow the more artful dimensions such as instinct to help guide you.

Without the craft we can’t afford our instincts. They will cost us too much money. We may end up defrauded, addicted, losing sleep, and losing a fortune, just trying to manage our money by using amateur skill sets in a highly professional and dangerous game of chicken.

In the realm of personal finance, the craft can help you to accumulate wealth safely, create a reasonable retirement plan, and so forth. But the art then allows you to consider how to merge that wealth into a happy, healthy life, day to day. The balance between art and craft will always be critical.

It takes discipline and attention to inner details to bring alive the full vision of the life you seek.

Money can create copious blessings and allow you the free time to do what you truly desire to do, or money can kidnap you away from everything you truly hold dear. To some, money actually becomes more of a burden than a benefit.

What usually is the first thing to undermine us is the gambling aspect of the human psyche—risking everything to go after a pawn while exposing our king. In the following chapters I will show you how to avoid many of the pitfalls and burdens of investing and money, so that you can grow your wealth safely, and at the same time create for yourself a truly rich life.

Let’s move on now to one of the main concepts of Rocking Wall Street.

THE END GAME

What is the game we’re playing? And how do we win?

When individuals are safely invested—when they and their families no longer have to be concerned about money—I call this the End Game.

Of course, getting to that point is seen as a rare event in this world. But actually, I believe the End Game can occur for more people far sooner along the money timeline than is commonly believed.

The first thing to realize is that as enjoyable as it may be for some of us to reach this level of success, at a certain point life usually demands more of us.

In 1998, I was “managing” my own money. (The quotation marks around the word “managing” are there because when you manage something in an amateur way, it’s not really managing.)

I would be down in my office/music studio (which used to be my music studio/office) buying and selling stocks and mutual funds each day on my laptop computer. One day I came upstairs to find my wife making dinner, with our two-year-old daughter sitting on the countertop watching her every move. They both smiled at me as I entered the room looking haggard and rather nervous. I had had “a very big day” as the title character in the movie Jerry Maguire once said.

I hugged Theresa and let out a huge sigh and said, “We made a lot of money today.”

She looked at me with her eyes turning just a tad watery (not from the onions, I think) and said, “I’m glad you’re taking care of the finances and the investing for the family. But every day you come upstairs nervously happy, or nervously upset, and you tell me what happened as if you’ve been in a war. Gary, I know you want to be a hero and a great provider for our family. And I love you for that. But to tell you the truth, I’d rather have an 80-year-old Gary with $8,000 in the bank than a Gary who makes $8,000,000 in the stock market and then dies in eight years from a heart attack.”

I was truly shaken by this revelation. It was like being awakened from a long dream. What was I doing with my days? When was the last time I had been truly free of stress? Even on weekends I was planning strategy, secretly waiting for the weekend to fly by so I could go back to the game.

I was spending my hours with my mind entangled in front of a computer screen, buying and selling a bunch of names and numbers. I was riveted to the computer, glancing every few minutes at some statistic on CNBC, nervously trying to beat a system that was ingeniously designed to beat the likes of me hour by hour!

Somehow I was winning back then and making big money! I had systematically discovered a trading inequity called international arbitrage. I was also playing the speculative dot-com bubble by day trading America Online (AOL), Yahoo!, and Amazon. I was buying them on days when the overall market was trending up, then selling them on the next down day. It was a big rush for me when I won.

But regardless of how I did on a given day, my mind could not let go of the game. The game, as Jerry Maguire’s wife once said, “had me at ‘Hello!’ ”

In fact, the game was now playing me, rather than vice versa. It was eating me alive even as I was raising my hands in victory.