MOM, MARKETS AND FLASHLIGHTS

t. man hatter

My mother was an RN. So it was pretty hard to wake up on a rainy, wintry school morning and feign illness. If you said you felt warm, had a fever, she'd take your temperature. A sore throat, she would get a flashlight and check.

Who knew what she knew or what she saw when she looked in there? It was a lot like one of those days that starts out cloudy and keeps getting clearer and clearer. To fool mom I was going to have to up my game--a lot. And believe me my brother and I tried.

Think of the market as mom. And don't be fooled by the term fool. The market's been there a long time, doing what markets do. Occasionally a newcomer pulls off a stunner or two. Economists, as they do for nearly everything, have a term for that, outlier.

Most of us are hardly outliers. Now don't get your undies all twisted in a bunch. That's neither bad nor good. Just is. Most of us are basic block-and-tacklers, to use a football idiom. We get better with repetition if we keep at it. It's a basic rule of life: Whatever you focus on expands.

A lot of people probably see Warren Buffett as a genius and that doesn't disturb me. Another way to see it, however, is he's a brilliant block and tackler, a real Mr. Fundamentals. He's put in the time, he's consistent and the chances are way better than good he's gotten better at it.

Several years ago I shared an office with an options trader, a pretty good one. One gray November morning when things were particularly slow, he told about his early market experiences. When he got out of college, clutching his freshly, new-minted business degree, he started trading options, something he'd only dabbled at but enjoyed a modicum of success in school.

Curious is as curious does, so I asked him how it went.

He told me terrible at first, just awful, as I recall. So I offered the usual assumption, laced with a trace of empathy such occasions often require:

"Had some big losers, huh.?"

"Oh, no !" he said, laughing. "They were all big winners. My first 8 or 10 trades went like Swiss clockwork. I thought I was a genius, knew everything.  And then...."

It's the "and thens" we all need to be mindful of that usually come without a warning, like mom with her flashlight.