"It is not happy people who are thankful. It is thankful people who are happy".
Every year since I started writing for RealMoney.com back in 2001, I have written a column on the day before Thanksgiving about my journey as a trader. Since this is the thirteenth time I've written this story, many of you already know it. But I believe that traditions like this are important, as they help us to reflect on what is important and provide perspective that we lose sight of in our daily life.
There are a number of academic studies that show that being grateful has a very positive impact on us emotionally and physically. Gratitude pushes us to focus on the positive things in our life, and when we have a positive attitude good things tend to happen to us. Making a conscious choice to reflect on the things that we are thankful for helps us to live better lives.
Another reason I do this annual column is that it is a good reminder of the cycle of life. Much like the stock market, life inevitably goes through positive and negative cycles. It is very powerful to embrace the idea that the bad times won't last forever and that we need to fully seize the good times when they occur. Life is change, and it is better to acknowledge it and celebrate it rather than just let it happen.
Twenty years ago I never dreamed I would be doing what I do today. I was lost, confused and deeply depressed. I had lost my job and nearly all my assets when I had become totally and completely deaf. How could my life possibly improve?
I had struggled with some minor hearing loss as I grew up in Bloomfield Hills, Michigan. I was the oldest of eight children and lived an idyllic suburban life. I went on to attend both Business and Law School at the University of Michigan. My first job out of college was with the international CPA firm now known as KPMG. I also worked for Deloitte Touche and earned a CPA certificate before going back to earn my law degree. After law school I eventually opened my own legal practice. I focused on tax and corporate law, and had worked on a number of interesting deals, including a merger of a local company with Honeywell (HON).
One day while on the phone negotiating with an IRS agent, I had great difficulty understanding what was being said. I had to make an excuse to hang up the phone and was forced to accept a fact I had been trying to ignore for a while. My hearing was growing worse -- and it was having a profoundly negative impact on my life.
I consulted the best doctors in the world, tried hearing aids and even took lip-reading lessons. But there was no way to stop the deterioration of my hearing. It wasn't long before I was totally deaf. This was not just a minor inconvenience. I was stone deaf, and had to have people give me written notes so that they could communicate with me. There was no way I could continue to practice law, and I was forced to give up my fledgling business endeavors. Luckily I had a disability policy through the Bar Association that gave me enough income to pay my bills -- but I had lost everything I had worked for up to that point.
One of the worst things about being deaf is that it is so isolating. As Helen Keller has said, blindness cuts you off from objects, but deafness cuts you off from people, and that is much worse. I had gone through a painful divorce, so my emotional state was already a mess. I really had no idea what I was going to do with my life. The only work that was available was uninteresting, menial and paid practically nothing.
My life started to change when I stumbled upon a personal computer owned by my brother-in-law, Fred. There were these new on-line services called Prodigy and Compuserve that were quite intriguing. They allowed for human interaction about a huge variety of topics and, best of all, it wasn't necessary to hear in order to fully participate. I soon was a very actively involved in various forums and greatly enjoyed talking with people for the first time in years.
Eventually I stumbled on some forums that were dedicated to the stock market. I had taken a few finance classes in business school and understood basic portfolio theory, but the way these people dealt with stocks was far different than what I had been taught. Many of these posters were active traders and based decisions on things other than fundamentals, which was the only thing that mattered in business school.
I was intrigued and started dabbling in a few stocks with my very meager savings. I had little luck at first, and lost more than I could afford. I tried traditional blue chip stocks but they moved so slowly that they had no impact on my account. I focused on fundamentals, but found they often were totally ignored for long periods by the market. I then spent considerable time and money on some very speculative small stocks, but was burned several times. Many of these stocks were disasters or outright frauds.
Eventually, I latched on to a group that was following the investing philosophy of William J. O'Neill, the founder of Investor's Business Daily. The focus here was a combination of technical and fundamentals. More importantly, there was also a framework that imposed discipline and helped to protect your capital.
This approach to the market greatly appealed to me, as it was rooted in psychology. What was important was the action in the stock charts rather than just balance sheets and income statements. I wanted to be in stocks that were moving and would reward me quickly, and it was obvious that you had to focus on the charts to find those sorts of stocks.
Back then we still were using 14400 baud modems; active trading was not easy, especially if you were deaf. I had a brokerage account, but the only way I could place trades was to physically visit my broker's office to enter my orders. Eventually, the first online brokers started to emerge and I was able to trade without the necessity of verbal communications.
I jumped into the market with both feet and started reading anything I could find. I began placing trades and eventually had some great success with small-cap stocks like II-VI Incorporated (IIVI) and Wireless Telecom Group (WTT), which are still trading today. They split several times when I held them, and I was stunned at the returns that they produced.
The Great Bull Run
What I really enjoyed about the market was that it was like a big chess game in which you had to anticipate the emotions that were driving the price of a stock. The charts were a great visual insight into the minds of traders. I studied them constantly as I developed strategies.
The more success I had, the more I was driven to press even harder. It was an ideal time for my approach to the market, as the great bull run of the 1990s played out. My small account had multiplied several times over. As the great internet bubble of 1999-2000 developed, I was making far more money than I would have ever made practicing law. It was hard to believe that something I enjoyed so much could be so financially rewarding.
I wasn't the only one making big money in those days, but what helped me tremendously was that I had established rigid discipline. I refused to give back the big gains I had won. When the market started to crack in March and April of 2000, I focused on playing defense and was able to keep my accounts close to highs.
Things were tougher after the bubble popped, but I loved stock-picking and was able to find good trades even in a tough market. I continued to learn and refine what I did and loved to write about it on the stock message boards.
I was a very active participant on the forum established by the Motley Fool on America Online. My message was very different to that offered by the Gardner brothers who ran the site. I was a constant thorn in their side, but they eventually set up a message board for active traders and that became my home and a vibrant community for traders.
At the time, one of the great momentum stocks of the bubble days was in play. Iomega had a back-up storage system but it was a darling of the Motley Fool, which preached that it was a stock to buy and hold for the long term. I traded it aggressively despite the warnings of the Fool and made a huge amount of money on it.
Herb Greenberg attacked the stock relentlessly and I engaged in some very spirited debates with him. Herb enjoyed my constant attacks so much that he eventually invited me to join his site on AOL, where I established the Shark Attack trading site. We had message boards devoted to trading and the Shark Tank was the first of its kind stock market chatroom. There was limited capacity and folks would rush to grab a spot each day. Many traders have very fond memories of the old Tank.
Eventually I moved to the internet and established SharkInvesting.com, where the Shark Tank chatroom still operates, with many of the folks who have been members for over 15 years now.
I greatly enjoyed writing about the market and sharing my insights. One day I sent a note to Jim Cramer and asked if I might write a few things for TheStreet.com. I was surprised to learn that Jim was familiar with my stock message boards from the Motley Fool days and he welcomed me with open arms.
I've been writing on RealMoney ever since, and have been able to write a book called "Invest Like a Shark: How a Deaf Guy with No Job and Limited Capital Made a Fortune Investing in the Stock Market" and have established a money management firm as well. Life has been good.
Ironically, it was the tragedy of my deafness that led to my success, and even that is no longer an issue. Medical innovation has produced something called a cochlear implant, which allows me to hear fairly well. It is not perfect, but I can carry on conversations and hear well in quiet environments.
My personal life also took a dramatic turn for the better over the years. I met a beautiful blonde girl on the beach in Florida. I could barely talk with her due to my deafness but we developed our own form of sign language and have been married for 19 years now. We now have three great kids that my wife home schools. Anneliese is 13 and is an aspiring dancer and writer. James III is 9 and is a vicious middle linebacker and tight end on his championship football team as well as a musical prodigy. He will be competing to play a Haydn concerto with a full orchestra next year. Sam just turned 8 and broke his arm playing football this year, but that doesn't stop him from collecting a variety of animals he finds in the woods.
Trading has changed quite a bit over the years and I have to admit that I miss the "old days" of AOL, when there was so much energy and excitement. The market has undergone a substantial change over the last few years, and I find it much more challenging and less fun.
I'm often asked if it is possible to repeat the success I've had in the current market. It is probably more difficult, because there is much more competition, but I'm absolutely convinced that if you have grit and determination you can do it. In fact I'm working on a new book that will focus on how to navigate through this much more challenging market environment. The essentials are largely the same, but tactics have shifted.
I want to wish all of you a great Thanksgiving and remind you that, no matter how great the obstacles and challenges are in your life, you can overcome them. I never dreamed that going deaf and losing everything would be the best thing that ever happened to me -- but it was.