A Fool and his Money
A Proverb says,
A fool and his money are soon parted. Back in the late 1990′s and early 2000′s I began my trading career in commodities. Back then I didn’t have a computer and I had to do my research the old fashioned way by going to the library in the evenings and staying late until they closed. I was doing fundamental research on the gold, silver, copper, sugar, wheat, and corn markets which were the markets I was interested in trading. I also had a subscription to the Wall Street Journal and a subscription to a charting service, Main Street Trading, which sent me weekly futures charts which I would utilize for my technical analysis. I did my technical analysis using the paper charts as I didn’t have a computer or trading program back then. I paper traded for about a year before I decided to put up real money and try my luck. I say luck now because I didn’t realize back then how manipulated the futures markets were and that I was entering a rigged casino and not a freely traded market. So I opened an account and put up $10,000 of my hard earned starter capital. That may not sound like much to you but it was a years worth of saving for me and all the money I had. I thought I knew enough about the futures markets to make a profit and be successful at it. Boy was I a fool! LOL! I learned really fast that no matter how much I studied the fundamentals or studied the chart patterns, that my account was constantly getting fleeced by someone “running the stops” . I realized later after trading for about a year and losing my $10,000 that in order to be a successful trader with futures you couldn’t use stop losses as the exchanges could see right where your stop loss was and would drive the price through it and you would lose your position no matter what the fundamental or technical analysis was saying. Being the fool that I was I had the audacity to think I was trading in a free market. What a joke! LOL! Needless to say I was pissed off but it forced me to ask a fundamental question. “What is money?” When I asked myself that question and realized that I didn’t fully understand what money was, it was then that my true financial education began. The $10,000 was simply my tuition fee to the financial school of hard knocks. I realized that I was a fool because I was trying to manage and trade money without knowing what money was. Luckily it was my money and no one else’s. However there are millions of brokers, financial advisers, bankers, financial planners, mutual fund managers, etc. managing other people’s money and they have no idea of what money is. Before you entrust anyone else with managing your money for you, ask them a simple question. “What is money?” If they cannot answer that fundamental question then run! That was the case with Bernie Madoff, Jon Corzine, and now Russell R. Wasendorf, Sr. who happens to be the owner of Peregrine Financial Group. PFG is the latest brokerage firm to have client accounts stolen by none other than JP Morgan. From Zerohedge: UPDATE 1: Account-holders may not be so surprised to find who is the custodian for the PFGBest FX accounts: none other than huge MFGlobal fans, JPMorgan! WOW! Who would have thought! Here is the link to the article http://www.zerohedge.com/news/pfgbest-now-mf-global-part-2-220-million-segregated-client-money-has-just-vaporized . Well I hate to be the one that told you so, but I told you so and so did many others with video’s on Youtube and site’s like Chris Duane’s site here. The other thing that is ironic is that Peregrine Financial Group or (PFG) is the brokerage that I opened up my first trading account with and lost my $10,000. Now don’t get me wrong, I think the money was well spent as I have learned a lot in the past 12 years since I paid my tuition to the markets. As a matter of fact I have earned my money back ten fold! The education that I received is priceless. Gold is money, nothing else and silver is more. I have also learned that Karma is a bitch!