My Stalker Wayne from Fidelity

There is a guy named Wayne A. who posts and sends emails under an assortment of different names. He generally seems really angry. I do know he is a former Fidelity employee of some sort, so perhaps that is the root of his anger! Nonetheless, he sent in this post the other day:

“So your Trend Following film turned into a movie called Broke: The New American Dream? How quickly trends can change. Well I guess that makes you a trend follower. Who is more obnoxious and has a fatter ass, you or Michael Moore. I wonder which of you goes broke first.”

Wayne. Come on. I am six feet tall and 180 pounds. Clearly I am a tad smaller than Michael Moore… All inane comments aside, it’s not my desire to stop the crazies, but even sometimes the loco ones present an opportunity to clarify and or augment a message. For those wondering about the title of the film (“Broke: The New American Dream”), wondering perhaps like Wayne that the title seems overly “negative” or perhaps is a change from my writings, think again. First, here is an explanation of the film. Second, the title was selected because I believe that it is the new American dream for many to be broke. Meaning, not everyone is broke. Plenty of people are doing well. But if the masses take actions, knowingly or unknowingly, that were not smart or well thought out, their ultimately goal was to be broke. If you take silly actions, actions that other smart people don’t take, even if you tell people that in the middle of taking those silly actions that you really want to do well, I don’t buy it. It’s like Seykota when he said (and I paraphrase) everyone gets what they want. If they did not really want to to be broke they would not have taken the actions they did (i.e. buy and hold, overleveraged real estate, etc.). I am sure some will not get that from the title, but that’s fine, it gives me the opportunity to create discussion and get people to think.

16 thoughts on “My Stalker Wayne from Fidelity

  1. Hey Mike

    You should really consider coming down to South Africa where we have the 13th largest stock market in the world and the largest single stock futures market on earth!

    In addition our banking system has not been affected at all from the sub prime crises,although bad debts are rising and business is slowing down.

    Not too many people have heard of trend following and there are lots of people wanting to get into trading.
    Johannesburg,Durban and Cape Town are the major cities in a country of over 50 million people and the powerhouse country of Africa.

  2. Thanks. I am always open to travel. I have presented to audiences in the United States, Paris, Vienna, Macau, and in Tokyo on several occasions. Have not yet traveled to S.A., but remain open to possibility.

  3. “If you take silly actions, actions that other smart don´t take, even if you tell people that in the middle of taking those silly actions that you really want to do well, i don´t buy it.” Do you mean, that some people are immune against education and teaching? Wouldn´t that mean that some people have a free will and the ability to choose to do the right thing, while others don´t. Smells a bit racist to me, but i guess i´m reading to much into it.

  4. People are responsible for their actions. If they don’t really look into the ramifications of the risks and rewards of something like buy and hold, if they just sit there and allow themselves to be seduced by the promises and trust it for years, and then when the day of reckoning hits, yes, I believe that they actually wanted the result of being broke. And that’s racist to you?

  5. Why is he comparing you to Michael Moore??? Cos from my own perspective, you guys are totally on different wavelengths. Haha. He seems like the really “angry at everyone for his misfortune” type. LOL!

  6. I don´t believe that anybody wants to be broke. You are absolutely right, people are responsible for their actions, but the decisions that one makes can only be as good as the knowledge and experience that one has. Making good investment decisions is a matter of education and i think everybody can be educated. To draw a distinction between people that can be educated and people that can´t be educated because they want to be broke anyway, is indeed racist.

  7. David, you are not reading what I am writing, but rather responding to whatever you want to respond to. If someone buys 10 condos no money down putting themselves way in over their head, a smart person with a good job, and the condo situation goes bad (like it did) — they wanted to be broke. My statements racist? Hardly. You calling my statements racist? Nutso.

  8. O.K. i take it back, racist is to strong an expression. But i still think that it is quite a pessimistic and fatalistic view of human beings when you say that some of them want to be broke. I don´t get that.

  9. How would you explain it then? You surely don’t think the real estate meltdown, for example, affected only one particular race, class or wealth bracket? It affected ALL.

    So tell me why they didn’t want to be broke? You are giving no credit to the people who did NOT take the dumb actions. Those people are the ones who did not want to be broke.

  10. As i said, i think it is a matter of education and experience. I´d bet that there are very few people with a Ph.d. who borrowed too much money to buy houses and are ruined now, but i can´t prove that. However, in general i would say, that the people who overleverage do it because they only see the upside of a trade. When you say that they want to be broke than this implies, that they see the downside too. You cannot want something that you don´t know of. I think they simply don´t see the risks. They are seduced, as you say. And that´s the point were education comes into play. When i make a trade i would also like to see the potential gains only, because it feels good, but i know better. I know the risks, because i have made a lot of trades and felt the risks and i have read a lot about the topic. Many of those people who lost money in this real estate boom and bust lacked education and experience. They didn´t have the opportunity to see what can go wrong. I don´t know when there was the last real estate bubble of epic proportions, but i guess that most people have never seen something like that in their lives. You are speaking from the point of view of somebody who has had many opportunities to take financial risks and you learned from those opportunities. I´m sure that most of the people who went bankrupt with subprime mortgages wouldn´t take the same risks again if they had another opportunity to make a trade. When you´re thesis is right, than they would do the same mistake over and over again if they had the opportunity to do so, like homer simpson who touches the wired donut again and again and again because all he sees is the donut.

  11. Not everyone with limited means and limited education made these mistakes. Your defense only appears after the bust to give an excuse. While everything was straight up where was the outcry? There have been booms and busts for 100s of years. If you ignore that data, you are at fault. And if you ignore that data, and still blindly roll into uncharted territories…then yes you can end up getting what you really want: broke.

  12. David do you think everyone who is currently losing money in the stock market is an unintelligent boob with 5 cents to their name? Of course not. So if millions of people adopt bad strategies, strategies that not everyone adopted, at some stage…”everyone gets what they want”.

  13. I agree, it seems that mankind is not learning from the lessons of history. Every generation has had its booms and busts. I firmly believe though that the individual is learning from painful experiences and is unlikely to repeat them. As a society we are a mindless homer simpson, forgetting the pain induced by wrong behavior almost immediately, but we are not a society of homer simpsons.

  14. On this last thread about people not going to repeat the same mistakes, i disagree. When the market is down, the emotional crowd will be in a state of regret and say “will never do that again”. Once things are back up (and really up, not just beginning of the trend), caution will be thrown to the winds and we will be into this all over. May not be real estate next time, but surely some other bubble. This is how the market cycles have perpetuated over the many centuries. Human attitudes have not changed.

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