Every year since I started writing for Real Money in 2001, I have written a Thanksgiving column about my stock market journey. Since this is the 21st time I have written this story, many of you already know it. I believe that traditions like this are important as they help us reflect on the priorities in life and provide a perspective that we lose sight of in our daily life.
Several academic studies 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 we are thankful for helps us live better lives. It is not happy people who are thankful; it is thankful people who are happy.
Another reason I write this annual column is because it is a good reminder of the cycle of life. Like the stock market, life has inevitable ups and downs. It is very powerful to embrace the idea that the bad times won't last forever and that we must fully embrace the good times when they occur. Life is change, and it is better to acknowledge and celebrate it rather than just let it happen.
Twenty-five years ago I never dreamed I would be doing what I do today. I was lost, confused, and deeply depressed. I lost my job and nearly everything I owned when I became completely deaf. How could my life possibly improve?
I struggled with 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 attended 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 earning my law degree at Michigan. After law school, I eventually opened my legal practice. I focused on tax and corporate law and worked on several 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 with 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 hand-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 fledging business endeavors. Luckily I had a disability policy through the Bar Association that gave me enough income to barely 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, which has a tremendous emotional impact. I had already gone through a painful divorce, so my emotional state was already a mess. I had no idea what I would do with my life. The only available work 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. These new online services, called Prodigy and Compuserve were quite intriguing. They allowed for human interaction about a huge variety of topics; best of all, it wasn't necessary to hear to fully participate. I soon was very actively involved in various forums and greatly enjoyed talking with people for the first time in years.
Eventually, I stumbled on some forums dedicated to the stock market. I had taken a few finance classes in business school and understood basic portfolio theory, but how these people dealt with stocks was far different from 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 classes.
I was intrigued and started dabbling in a few stocks with my 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 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 Investors 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 and melded fundamentals and technical considerations. 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 used 14400 baud modems, and 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 emerged, and I could trade without verbal communication.
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 IIVI, now Coherent Corp (COHR) , 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.
What I enjoyed about the market was that it was like a big chess game where you had to anticipate the emotions driving the price of a stock. The charts were a great visual insight into traders' minds, and 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 and was not unlike the post-Covid run we recently enjoyed.
My small account had multiplied several times over. As the great internet bubble of 1999-2000 developed, I made 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 actively participated in the forum established by the Motley Fool on American Online. My message differed greatly from the founding 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 backup 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 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 20 years.
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 Real Money 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. I am about to open my money management services to smaller accounts for the first time. Life has been good.
Ironically it was the tragedy of my deafness that led to my success. Even that is no longer an issue as medical innovation has produced a cochlear implant, allowing me to hear fairly well. It is not perfect, but I can converse 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. We had a difficult time communicating at first due to my deafness, but we developed our own form of sign language and have been married for 25 years.
We now have three great kids that my wife homeschools. Anneliese is a pre-med student at Penn State. James III is 6' 4" now and still growing. He plans to study business and is a musical prodigy. He played at Carnegie Hall when he was 10 years old. Here is a piece from a few years ago. Sam just turned 15, loves baseball, and is programming his own video games. He plans to study engineering and architecture in college.
Trading over the years has changed quite a bit, and I must admit that I missed 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 in certain ways.
I'm often asked if it is possible to repeat my success in the current market. It is probably more difficult because there is much more competition, but I'm convinced that if you have grit and determination, you can do it
As a gift to readers, I'd like to offer you a free copy of "RevShark's Essential Guild to Market Success". It is a short book outlining my market philosophy and basic trading principles.
I 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 to happen to me, but it was.
(Please note that due to factors including low market capitalization and/or insufficient public float, we consider WTT to be a small-cap stock. You should be aware that such stocks are subject to more risk than stocks of larger companies, including greater volatility, lower liquidity and less publicly available information, and that postings such as this one can have an effect on their stock prices.)