I started at Smith Barney right out of college and stayed with them, and subsequent firms for over 20 years. I was hired in June 2000. Everyone said, “there’s never been a better time to start in this (stockbroker — financial advisor) business.” My training class was (and I believe still is) the largest they ever had.
I was laughed at one day when I asked where the Dow Jones Industrial Average had closed. “No one cares about the Dow anymore” was the reply. “The NASDAQ is everything.” The dot com bubble had just peaked in the previous March. Few knew that would be the market top and that those price levels wouldn’t be seen again for many years.
At my “Segment 3” training in Hartford Connecticut we cold-called pitching the FMA — Financial Management Account — a checking account with a yield of over 6%. It was pretty easy to open new accounts. It was also a much different time. Imagine cold calling today.
As a new kid fresh out of school, I followed the Firm’s guidelines about markets and investment products. I was doing well and having success, and even made “blue-chip council” status a couple of years. But I wasn’t able to call a client and tell them that they had made money in the market until 2003. That was a nice change of pace and things felt better until 2007.
I’ll never forget listening to Bloomberg radio on my morning commute and hearing the advertisements for home equity loans with no income verification and loans up to 130% of appraised value. I knew enough to know that sounded….. funny. But I had no idea the magnitude of the financial crisis that was to come.
When the financial crisis and accompanying bear market hit in 2008 I held clients’ hands and offered reassurance as they watched their portfolios diminish. I couldn’t shake the thought that there had to be a better way. I started to question the efficient market hypothesis taught in my college finance classes and the modern portfolio theory with its “efficient frontier” that was the backbone of Firm recommended portfolio construction.
I had always been interested in charts but now I turned back to them more heavily, trying to learn even more about technical analysis and risk management. In June 2009 I launched my first discretionary portfolio for clients. The pitch was simple; let go of “buy and hope” and grab ahold of systematic, relative strength trend following. The objectives were as simple as the pitch. Buy stocks that are trending up and showing relative strength. Then don’t be afraid to play defense when the market tells you to.
This worked well as the portfolios generally outperformed in bad markets and underperformed in strong bull markets. Exactly as we told clients they would. They took comfort in knowing that there was risk management and a sell discipline built-in.
By this time, however, the trading bug had bitten me hard. I wanted to do even better.
My continued interest in technical analysis and my strong desire to always do better for my clients led me to pursue the CMT designation in 2014. This program usually takes three years to complete. I started in January and completed it the next February. The subject matter came to me naturally since I was already using it so heavily.
I left Morgan Stanley in September 2020 as a First Vice President and Senior Portfolio Manager. I immediately contacted T3 Trading Group, which I had been learning about for some time, and was offered an interview.
Now I’m trying to figure out life as a prop trader. Trading and portfolio management have a lot of skills and knowledge overlap. But there are many differences too and I’m still learning and adjusting.
I’ve always written about the markets and my thoughts around them. But as a major wire-house employee, I was beholden to the compliance department and the dreaded “Internal Use Only” stamps. I did distribute articles and newsletters to clients regularly. But this recent streak, brought on by my participation in the Ship 30 for 30 writing cohort, has been my first experience truly writing in public. I love it.
I’m a firm believer that, with a little knowledge and a lot of discipline, anyone can trade and manage their own money. Proper risk management is absolutely crucial. For me, technical analysis is the best tool for that job. I want to help simplify that for the DIY trader and investor and help them gain the knowledge and confidence to succeed. Writing online is the best way.
I don’t know it all. And I certainly don’t have the market “figured out.” But I am a constant learner. I always want to get better, and I want to do anything I can to help others get better as well. So as you read along I encourage you to help keep the conversation going. If you have feedback or suggestions or corrections about something I write, please share. And if you want more clarity or explanation around something, let me know that as well. We’re all fishing from the same boat. And the more we can help one another the better.