Quote from a Pit Bull – Losing Streak

I have been reading the book Pit Bull – Lesson from Wall Street” Champion Trader, and I wanted to insert an interesting, long quote from the book. The chapter title is Never Short a Republican. I think the quote is appropriate to describe the current political climate here in California where the Democrats have a super majority.

The year was 1982 and Ronald Reagan is President and the Republicans have control of the Senate, and Marty Schwartz was a Democrat because of family tradition. The midterm elections are happening. He writes, “Living in New York City meant that I was giving 57 percent of every dollar I made to the government in income taxes. To me, governments had become gluttons who just couldn’t seem to get enough of my money, and for what? The streets were full of potholes, the subways were covered with graffiti, somebody was always getting mugged, city workers were always going on strike. I wouldn’t have minded paying the taxes if I though that they were doing some good, but when I saw how my tax money was being wasted and mismanaged, I’d decided to vote with my wallet not with my heart. God, I was even sounding like a Republican, but that’s what happens when you start making big money, and thanks to the S&P 500 futures, I was making big money.”

What happens later in the chapter, is he tries to short a bull move in the stock market. He keeps adding and adding to his short position and ends up losing $800,000 (1982 dollars)!

He ends the chapter by talking about breaking a losing streak in your trading. The solution? STOP TRADING. Stop the losses, stop the bleeding by closing your losing trades and take a break. “The market will be there when you return.” “You can never shift from reverse to first gear without going through neutral. “