No Crying In The Casino

"From time to time, everybody goes bust" - Joey Knish

Browsing social media last night and this morning, I was greeted with dozens of examples of people posting their “loss porn,” as the Reddit traders would call it, with one P/L after another showing huge losses.

Some traders posted ominous things about blowing up their crypto accounts, forced liquidations, and massive losses. Some even also posted, insinuating they were considering self-harm. Posts like these are everywhere:

As are ones like these:

Let’s assume half of these posts are people joking around, and the other half are dead serious. That would be alarming.

And so, this weekend is a good time to remember a couple important lessons.

First is the fact that things can change any day in the market without notice—as I have been saying for years and explained in my comprehensive wrap-up yesterday after the market closed.

The Columbus Day Massacre: My Thoughts

Second, as BuccoCapital on Twitter reminded, “there’s no crying in the casino.”

If you’ve been spending the last five years patting yourself on the back over what a genius you are because you have minted it in cryptocurrencies or equities that are trading at 10,000x sales with no net income, perhaps you should reconsider taking to the public forum to air your grievances with how you’ve managed your capital on one particular day.

If you’ve spent the last decade shit-posting seasoned investors like Jim Chanos or Peter Schiff on Twitter and just can’t figure out why they can’t see things your way because you’ve always been right, now would be a good place to see if any of their skepticism or warnings about markets can make their way through your blood-brain barrier.

If you got smacked around on Friday but didn’t take a total loss, turn a shitty day into an asset by starting to tell yourself the honest truth—you don’t know everything, and none of us do—instead of whatever lie you’ve been telling yourself about how you’re going to be able to outperform forever because you happen to have caught the tail end of a nominal hyperinflationary boom that could very well end in the United States dollar dying while your ego portion of your brain was still mushy and developing, like an infant’s skull.

It’s a great weekend to ask yourself, “Am I quickly disregarding fraud warnings about a company issued by a man who teaches a class on fraud at Yale and who called Enron’s collapse ahead of time?”

Or, “Am I quick to ridicule someone’s stance on Bitcoin or gold, despite the fact they’ve been in the game for decades and have amassed enormous personal wealth and one of the best grasps of free-market economics out of anybody in finance today?”

If the answer is yes to either of these, maybe it’s time to act a little less like a hyena and a little more like an adult. Buck up. Act like you’ve been here before. Take the pain. Learn from the pain. Come back better.

After all, the stock market is an adult game with real wins and real losses.

Third, assuming that half of posts like these are real…

…it’s stunning to see, after simply one 3% drawdown in the market—after we have done nothing but rage to all-time highs nonstop since the market plunge in April.

It is proof positive that investors have been seduced with insanely unrealistic expectations about risk and how markets work — as I wrote in February:

This Next Market Crash Will Break Our Fragile Brains

This, as I have been saying for years, is a product of batshit insane monetary policy—which is set based on keeping the stock market at all-time highs, regardless of the two supposed mandates that the Fed has.

Everybody who has been in markets for a couple of decades has learned these lessons the hard way. Nobody knows more about being an arrogant, hubris-filled dickhead and getting a comeuppance multiple times more than I do. At some point, the market humbles you; you throw your hands in the air and surrender to the idea that there are people who know more than you, and that the market and its external driving factors are things that are going to be impossible to always predict.

When I was clearing out my old podcast episodes at the beginning of the year, when I decided I wasn’t going to do the podcast anymore, I left a few up for good measure—a few of my select favorites. One of them was a podcast I did with my friend Sang Lucci about blowing up your trading account, how often we’ve done it, and how it is a rite of passage along the way. Skip to about 25 minutes in when we get to it. I left it up in hopes that anybody going through the same thing we had gone through could take some comfort in listening to it.

Finally, to the extent posts about self-harm online are serious, I want to speak directly to anybody who’s having such feelings and reassure them we’ve all been there and they are not alone. They can always DM me on Twitter, shoot me a message here on Substack, or contact me through other means, and I’ll try to do my best to remind them that, as Joey Knish says in Rounders, it’s not the end of the world.

“From time to time, everybody goes bust.”

This is the game we choose. Money is not the end of the world and should never be. Would anybody choose to live or die over it, although I realize that’s not the way the world works?

And to my longtime followers—what does it say that I’m writing posts urging people thinking about doing the unthinkable not to do so over one 3% drawdown?

This is exactly the type of situation I’ve been talking about for years: an unexpected move lower in markets at a time when investors are the least mentally prepared to ever handle it. Hope everybody keeps their head on a swivel and ducks and weaves their way through any continuing volatility this coming week.

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