The Short That Almost Killed Me

Let me tell you about the short that almost killed me.

It was back in the mid-’90s, around 1996 or 1997. I had my own hedge fund in Boulder, Colorado. 

We were doing about 100 trades a day, so I was always taking shots at different trades.

If a trade didn’t go my way, I’d just get out and move on.

But one day, I found myself like a deer in the headlights. This trade moved so fast, I felt like I was set up.

The stock was Masstec. I’m not even sure if the company still trades. I can’t quite remember the ticker, but I remember the pain.

See, we had a terminal that let us see institutional-only orders that other brokers couldn’t see.

Well, to this day, I still think I was set up and someone had a fake order put out there to sucker me in.

In any case, this trade moved against me so fast that it just caught me off guard.

I should have reeled it in right away, but I didn’t.

I let it run and lost a ton…

I can’t even begin to tell you about the sleepless nights and not telling my wife.

What that mistake taught me is to never let a little loser turn into a big loser — That’s the big lesson here.

There are a lot of reasons for that.

For one, it took away profit I already had booked in other trades.

Plus, as I said, I was running my own hedge fund and if I didn’t make a profit, I didn’t eat.

Simple as that, I had a wife and two boys.

Then there’s the emotional toll.

I was having a great month, and this loss just made me so mad.

It affected my trading beyond just this trade.

These days, I cover my losses quickly. I take a loss at 7%, that’s the most I’ll tolerate.

It’s a hard lesson learned, but an important one.

Remember, cover that loss quick. Set your limit and close it out if it’s moving against you.

Trade well,

Jack Carter

P.S. Speaking of mistakes… Have you seen the MASSIVE amounts of money the government wastes? If only there was a way to tap into the companies that get all that money… Check out what I discovered here.

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