One Traders Experience.

In year 2000 or there abouts …I bought my first laptop and went online for the first time and found a guy named Nich Guarino ….he is still around. Wall Street Underground…a very convincing and prolific financial blogger.
I bought his subscription with was I think $5000 for a year.

Around the beginning of 2001 He was very bearish on the Dow…so He had us Selling Dow Futures .

Each 100 points on the Dow contract was $1,000

https://en.wikipedia.org/wiki/Dow_futures

. Here’s how I ended up with 20 contracts …keep in mind this was my First ever experience with Futures. I always wanted to trade futures ….so |I took a little online tutorial and set up an account with a Futures Broker .

I was pretty green…All I knew up until then about investing was was Buy zero coupon bonds in the 80s

The cupons were stripped but the underlying value of the bond was written at the bottom of the bond market…a few years before I bought them….But they were readily available to buy and hold. So at the reco of my”broker” I did.

Put 100% of liquid assets in these things and

…they paid something like 14% compounding every year fore 30 years….Honestly….something like that….look it up. I remember laughing when I saw I bought something that doesn’t mature (expire ) for 30 years….the Bonds said due and payable in 2015 ( written as a 30 year bond in the years between1980 and say 1985)….so one only needed to hold them for 30 years to get astronomical once in a century type returns with ZERO risk !!! Imagine the compound interest at the end of 30 years ? very happy eh…But in 195 ( at 35 years old) I’m not thinking of whts going on in 2015….turns out 14% in 2015 would have made a lot of folks happy eh ? about 10X the going rate …ha

That was my first investment … . My broker recommended “zero cupon bonds” so I took em and held for maybe 15 years….and sure enough 14% a year…maybe 16….but ridiculous by todays standards.

Then…I got bored and apparently fed up with success and bored of making money…and a paltry 14% a year….hell it took 4 years to double or something like that.!! Screw this zero risk….I am a speculator I will make a fast killing in the Futures Market….They say its a tough way to make money and the risk is horrific…Exactly what I was looking for…at least in a small way…Well small way lead soon to selling all the bonds to some sucker !

And buying phys gold.(30%)

And also a futures account ( 70%).

So far so good and the story gets even better!

Back to Nick Guaroino….He was relentless….sell 1 Contract for every $100 move in the Dow…Up or Down

OK…I bet the farm….and added and added and added all thru that year 2001 . My memory is rarely precise but I am sure this was 2001

…..follow along here…… From Jan 2001 to Sept 2001 I just kept adding and rolling over to the new contract and getting margin calls which I gladly met…I figured this guy was god !

Well by now you figured out the punch line….now do the math too

Sept 11 !!!!! The markets were closed ….they opened a few days later….now remember I sold these Dow contracts via telephone to my futures broker…yes A land line Virginia.

So somehow I get thru to Nunzio…they guy was always cool and calm to deal with and he said I guess you want to buy 20 Dow contracts at the market and….meekly… I said yes please….that was 9:29…at 9:30 he quoted me Down 500 points…I’ll Buy back half OK ?…..I said 25%…so he did but the fill was Down 400 …so I “Lost” 100 points in the seconds it took to execute…then it just kept dropping for 4 days and at the worst the Dow was down 1500 points and we bought em all back at about an average of 1000 points gain = $10,000 per contract x 20.

Of course I felt shame ( making an accidental profit from this horror)…Nunzio was one of those with a story he was speaking with a colleague at the time of 911)… at the same time I felt shell shock from my first futures trade.

And yet I was Hooked !

Anyhow the point of this story is…I took out maybe 20,000 for a reno and Blew the rest trading Dow futures short for the next 3 years…The only reason My account lasted that long is I was Long Gold futures at the time…but the Dow took it all back !

No more futures for Fully….Fully cant handle 10 to 1 leverage !

So now I settle for the boredom of Micro Miners 🙂

Anyhow…Good luck to you guys shorting the market ( hopefully with maximum 3X leverage) you are going to need it…its addicting and very very tough to time in and out.

If anyone can do it….you guys can

🙂