Read on Twitter
THE RISE OF THE RETAIL TRADER: In February 2020, I deposited >$80,000 into a new options account (exact numbers unnecessary). In just 10 months, I have returned over 17x (Yes, 17x). Here's at a high level what I learned:
1) SCARED $ DOES NOT MAKE $: All calls. Big swings. But no 'yolo's' or single plays that made portfolio. Some days I was crushed with big losses. Some days I had massive gains. Most people can't/don't want to deal with it. Most ppl would stop after X.
2) BIG WINS: Initially I bought $PENN at $11, $TSLA at $600 (pre split), $PTON at $27, $ZM at $90, $DOCU at $75, $CRWD at $41, $SQ at $50, $BILL at $39, etc.
Obvious now, but back then few knew these companies. I also rode my winners; too many people gain 50%-100% then sell their winners/keep their losers. This is a big mistake. Also, pay up for winners.
3) IRRATIONAL MOTIVATION: I have an irrational motivation for success. Some people watch TV at night. Some people scroll on IG. I wanted to learn about the markets and stocks. I was curious. I was angry. The smartest ppl that I know are curious.
This is a hobby for me, an outlet. There is never enough, and happiness is a fleeting moment, at best. Stress and pressure are constant. That's fine, this is the life I choose. But then I also have the right to my spoils. I live my life on the extremes.
4) EMOTIONS: People are too emotional in business. They focus their energy on things that either a) don't matter or b) that they can't control. It's ok, it's human nature and society. But if you want to make money in the market, you must take your emotions out.
You can't love or hate a stock; you can't be stubborn. You must admit when you are wrong. You then must understand why you went wrong and how to improve. Very few people do this bc it hurts/is unnatural. You must take accountability. Pain + reflection= progress (dalio).
5) CONVICTION: You can find confirmation bias anywhere. You must entertain both sides. Be able to have thoughtful disagreements. One must be somewhat contrarian to make gains. But you can't be too early either. Most people are sheep because it feels good and safe.
6) U COULD HAVE DONE THIS: Anyone could have done this. Anyone. Yes, even with $500/$5k, you could have had similar returns. This had nothing to do with my upbringing, family, connections, access; market doesn't care about race, gender, background.. This is refreshing and raw.
7) MINDSET: You can either sound smart or make money. This is important. Most ppl would rather sound smart than make money. Choose one.
8) MY NEXT STEPS: 1) pay taxes. 2) Realign and reflect in December 3) Begin my 2021 goal: 4x.
