The very first thing I can relate to is how the movie started. Bud Fox commutes to work. He rides the train and walks a few hundred meters to get to his office. When he arrives, he still has to slug it out with other employees in order to get to the elevator first. I experience this every day at work. I walk to the tricycle terminal under the scorching heat of the sun, get to another place where I ride a van bound to Ayala, get off at the last Mini Stop at Kalayaan Avenue, then walk a few hundred meters to my office building where most of the time, the line to the elevator is long.
An old man by the name of Dan reminds me of my not-so-young officemates and some family members. They’re in their late 40’s and early 50’s and yet they’re still working their asses off doing what they don’t want to do just to earn a living.
Bud Fox’s boss said “Stick to the fundamentals. Good things sometimes take time.” While most traders who can relate to this quote would say it’s an approach to trading (fundamentals vs technical), I saw it as a reminder for me to stick to the basics. I realized that I reached five years trading and yet I don’t have a sound risk management approach which is a fundamental requirement if I want to be a great trader.
Gordon Gekko is any great trader today. He could be Zeefreaks, Kidlat, Charles Lim, T3, or Imbang Klase. He’s an enigma. He’s so good he becomes an excuse for people not to try. I am like Bud Fox who wants to get in contact with these great traders. I did everything I can to be part of the Zeefreaks Tribe. I know I couldn’t get in via Subasta. So I tried my chances in the Gentlemen Bastards Program and failed. Then, after more than a year of following the tribe trying to copy their trades, I got in the Bastard Program.
“Life all comes down to a few moments.” This quote of Bud Fox reminded me of what Kap said at IMPACT:
The challenge is getting past the fear that stops me from
making that decision.
“You wanna be in your sixties still pitching?” Bud Fox’s friend Marvin asks. This to me is something I dread. I don’t want to work for someone else ‘til I get 60 years old. That’s horrible. I want to retire at 40. Early 40’s is late enough. This means I have at most 15 years to be the best trader I can be.
“The public’s out there throwing darts at a board. I don’t throw darts at a board. I bet on sure things. Read Sun Tzu, The Art of War. “Every battle is won before it’s ever fought.”” According to Mark Douglas in his book “Trading in the Zone”, a good trader must have a probabilistic mindset which means that he should accept that his trade could possibly be a loss. When Gekko said he only bets on sure things, he probably means that he only takes trades where he has an edge where the probability of him being right is greater than being wrong. Otherwise, why take the trade? Why go into battle if it’s not in your favor? When I take trades, sometimes, I buy stocks where there are no set-ups. It’s just my emotion that took over. It’s just the fear of missing out manifesting itself. Sometimes I take trades that have bad risk-reward ratios just because I want to get back what I lost from the previous trade. Sometimes it’s just my boredom because my positions are not moving. All these things that I did, they are battles that I shouldn’t have gone into. I could’ve just stayed on the sidelines and waited for the perfect opportunity to strike.
“A fool and his money are lucky enough to get together in the first place.” These are the people who get one giant killing and immediately think it’s going to be like that forever. I personally had moments like this. When I made a killing in $ION from 0.70 to 2.00, I thought that I already have the skills to replicate it. Heck I even thought of resigning from my current job. That I could make money easily like that.
But the reality was, I didn’t have the skills yet. So after that trade, I kept on losing money until eventually, my port was down again by a huge percentage. Relating it to T. Harv Eker’s lessons, I was a “fool” because my financial thermostat was set at that fool level. So when the money came and got my port to “genius” level, I thought I was a genius. But then I gave all my profits back to the market because my thermostat is still at fool level.
“You need guys that are poor, smart, and hungry. And no feelings. You win a few, you lose a few, but you keep on fighting.” This is me. I haven’t figured out how to manage my emotions that well yet, but I know I have what it takes. I just have to keep going. Failing forward. Learning from my mistakes and not repeating them. Doing better than before.
When Gekko told Bud about his profit from his first real estate deal, he said “At the time I thought that was all the money in the world. Now it’s a day’s pay.” It reminded me of Henry Tan’s line from the last Road to Consistency workshop. “Yung port ko dati, day change ko na lang ngayon.” And also of what Kap shared sa IMPACT workshop.
- 5-year income turned to 1-year income
- 1-year income turned to 1-month income
- 1-month income turned to 1-day income
To all those who attended the last TRxForum, remember Kap's port snap in his CH play? The one that lasted five days? That's my 5-year income working for my employer.
By the time Gekko was trying to convince Bud to get inside information for him, this time, he’s like the personification of delusions of grandeur. Riches beyond imagination, rich enough to own a private jet, one hundred million dollars. Usually, this is what gets newbie traders into the market thinking it’s easy to get rich quick. Blinded by the rewards without weighing the risks involved.
“Remember, there are no shortcuts, son. Quick-buck artists come and go with every bull market. But the steady players make it through the bear markets.” This couldn’t be more true because I’ve had personal experience. This 2018Q1 was a bull market. I quadrupled my port in less than three months. But when Q2 happened, I lost almost all of my profits. This is why I’m still studying and reflecting on what went wrong. What I lack and what I have to do more of. There are definitely no shortcuts when it comes to success.
“Bet the ranch. It’s on automatic pilot to the moon.” This is what hypers told me during my first years as a trader. This was especially abundant when I was a member of different facebook groups. And I personally got dragged into those schemes losing me my hard-earned money.
When Anacott Steel was going up, Bud Fox suggested to Gekko to sell it and book 24million dollars in profits. But Gekko said “First lesson in business. Don’t get emotional about a stock. It clouds the judgment.” This is another trading challenge for me. I realized that when a stock that I’m holding goes up, I get high. When it goes down, I feel depressed. Not every time. But certainly, there shouldn’t be any time to be emotional about a position. The best approach is to see it objectively and follow the trading plan. The scene was Gekko sitting on a couch watching TV. He’s so “in the zone” that he knows exactly what to do in that scenario.
“The key to the game is capital reserves. If you don’t have enough, you can’t piss in the tall weeds with the big dogs.” In trading, you can’t trade if you don’t have capital. And you certainly can’t ride the high flyers if your port doesn’t have anything in it.
--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- Sun Tzu’s Art of War:
If your enemy is superior, evade him.
- I am a momentum trader and I don’t have a downtrend set-up yet. Therefore it’s better for me to stay on the sidelines, be defensive, and not trade on a bear market.
If equally matched, fight.
- I am a momentum trader and I thrive on a bull market. Therefore the best plan of attack on a bull market would be to go aggressive.
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“Money never sleeps, pal.” – Gordon Gekko
Passive income. Rich people make money work for them. They don’t work for money. They could sleep all day or go on vacation for a month and it wouldn’t affect their income because they have set up a system that works even without them.
“This is your wake-up call, pal. Go to work.” This quote applies to me in its truest sense. I’ve been trading for five years and yet I’m still not consistently profitable. I have read lots and lots and lots of articles and blogs about trading. I’ve watched thousands of trading and motivational videos. I’ve done thousands of trades. But I’m still not consistently profitable. This proves there is something wrong. Not only with my system. But most importantly, with me.
There is a scene where Gekko’s son throws a strawberry and it hits the face of Gekko’s lawyer. What’s saddening is the lawyer’s reaction. He couldn’t do anything but remove the strawberry. Not because it was thrown by a child. But because it was thrown by his employer’s son. Just like in my current job, I can’t complain about going to work even when there’s a typhoon. When I’m sick, I have to inform the authorities. I can’t argue about the boring stuff I do. I can’t refuse a double shift if there’s a shortage of people. If I want some time off, I have to let my employer know. Basically, my employer controls a significant chunk of my time and therefore my life. I want out.
“The stakes are going up. No mistakes.” In the big leagues, it’s different. The way I handled my five-digit portfolio should be different from handling a six-digit account. What more for the seven-eight digit account of the ZFT mentors. If I want to handle and make as much money as them, I should trade like them. No room for mistakes.
“We’re all one trade away from humility.” – Marvin
This rings so true to me. It has happened to me countless times where I would make a killing (+30%,+40%,+50% profits) in the market and then give all those profits back, even more, because of poor trading decisions. The market has humbled me so many times.
Darien is the personification of good trades. Whenever Bud Fox makes a
lot of money, Darien is there.
Whenever I experience good trades, whenever I make 20%, 30%, 40% or more profits from a single trade, I have to admit that it really feels good. Like everything is awesome and nothing could go wrong. What I failed to realize, like Bud Fox, is that this “feeling” is what would cause my downfall. Because almost always after a winning streak, I would take bigger risks. I would take set-ups not in my arsenal. I would take factors which don’t help me in objectively assessing the market. As a result, my profits would get burned and I would end up with a loss.
“In my book, you either do it right or get eliminated.” Gekko tells the board of directors of Teldar Paper. To me, the market is unforgiving. If you come unprepared, you’ll lose your hard-earned money. If you trade emotionally, you’ll lose. It’s survival of the fittest. You can’t cry or beg your way to profitability. Only the strong survive. And strong people are those who can execute their trades objectively just like Gordon Gekko liquidating Teldar Paper. This is why he said “Greed, for lack of a better word, is good.” Because greed makes us better persons. Greed makes us better traders. It makes us hungry for knowledge and skill.
“Darien! Lightning has struck.”
“It’s not always the most popular guy who gets the job done.” The consistently profitable traders are not always the ones who post port snaps on social media. They’re not always the ones who are active on gatherings and always show up on events. They ask questions, plan for contingencies, and seek feedback. Most of the time, they are the ones who spend their time at home, studying and reflecting on their performance finding ways to get better and better. Because as they say “Well done is better than well said.”
Gordon Gekko is like the market. He’s always right. You can’t argue with him. If you give him the slightest chance to take money from you, he will, just like what he did to Bud Fox and Bluestar. He’s all-knowing and always on full guard. If you get emotional when dealing with him, it’s over. He’ll take advantage of every single weakness you have and shove your face in the pavement. As what Darien told Bud, “Don’t cross Gordon, he’ll crush you.” But he’ll let you win sometimes. Yet the moment you try to take much more than what he’s willing to give you, you’re in for a beating. “It’s all about bucks, kid.”
--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- Bud Fox: How much is enough?
Gordon Gekko: It’s not a question of enough, pal. It’s a zero-sum game. Somebody wins. Somebody loses. Money itself isn’t lost or made. It’s simply transferred from one perception to another, like magic.
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Gekko tells Bud about a painting he bought 10 years ago for $60,000 which he can sell for $600,000. “The illusion has become real. And the more real it becomes, the more desperate they want it.” We can think of the illusion as a trade idea. The 3rd telco play for example. When one saw $NOW as the potential 3rd telco play, he buys a lot, then tells other people, posts it in various facebook groups, then more people buy it. The more people buy the trade idea, the more real $NOW becomes THE 3rd telco play and the more desperate people want to have it. The price then goes up and up until eventually, the illusion reveals itself as simply..
...an illusion.
Bud tells Mr Mannheim to buy Bluestar but the old man told him, “The main thing about money, Bud… it makes you do things you don’t want to do.” And he’s right. Money makes me do things I don’t want to do. Like wake up early in the morning to prepare for work. Force-feed. Shit. Commute under the heat of the scorching sun. Do things that only make my employer richer. Do it for nine hours. Go home. Sleep so I can do it again the following day. But on the bright side of things, money makes me improve my own self. Money demands that I become disciplined in order to make more money. Money makes me push myself to my limits and break past them.
“Man looks in the abyss. There’s nothing staring back at him. At that
moment, man finds his character. And that is what keeps him out of the
abyss.” - Lou Mannheim
Here is my personal reflection on this quote.
“Man” is me and “the abyss” is self-destruction.
“Man looks in the abyss. There’s nothing staring back at him.” He means that there is nothing to gain by being self-destructive. There is nothing to gain by dwelling on what went wrong or what could go wrong.
“At that moment, man finds his character.” By realizing that there is nothing to gain from dwelling on the past or looking at what could go wrong, I can focus my energy on myself. On finding out who I am and what I am capable of. I can focus on my strengths. I can focus on what I want to do and what I need to do.
“And that is what keeps him out of the abyss.” By attaining self-awareness, I can overcome failure.
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Bud’s boss, Lynch, is like some of our friends and family who are only there for us when everything’s going well. They praise us when we do good and celebrate with us. But when the downtime comes and we need help, they’re nowhere to be found. When I told my family that I’m going to pay a certain amount of money for the IMPACT workshop, they were all against it. “Baka ma-scam ka.” “Ibangko mona lang yang pera mo.” “Umayos ka nga.” “Wala kang mapapala dyan. Sayang lang pera mo.” But whenever I made money, they’d ask me to treat them. It’s very disappointing and saddening to finally realize, that the one’s closest to me are one’s who’ll stop me from succeeding. Maybe because they want me to become as miserable as them. But I’m not like them. The things I learned from them are just mental files as T.Harv Eker would say. I choose to adapt new ways of thinking that support my happiness and success.
“Maybe that’s the price, son. It’s gonna be hard on you. But maybe in a kind of screwed-up way it’s the best thing that could’ve happened to you. Stop going for the easy buck and produce something with your life.” Bud’s father reminds me that failure can sometimes be the best thing to happen to me in order to teach me a lesson: NEVER TAKE THE SHORTCUT. That I must welcome wrong turns and mistakes. Success encompasses setbacks. Skills take time. Mastery takes time. Success takes time.
This is really a wow!. Thanks FMC. I hope meron updates sa blog mo sir. 😁
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