Reasons Not To Use a Real-Time Market Scanner

Added on by C. Maoxian.

This section from @tagrtrades recent blog post caught my eye:

I’m slowly trying to move from a scalper to a bigger picture trader. The biggest catalyst to this change was letting the subscription to my intraday scanning service lapse and focus on my pre selected watch list. Sure I miss trades, but I know the trigger points I’m looking for and don’t find myself shooting from the hip nearly as much as I have in the past. I’m also trying to look at charts outside of just the 1-5min timeframe I’ve done for years. Pulling back and getting a clear hourly view has helped me look for areas where I can target for more than just a few cents and get more % out of each trade.

I've had a few thoughts about the pitfalls of using a real-time market scanner:

  • Information Overload

Even when you really fine-tune your scanner, it's still spitting out dozens of things to look at every day. There's just too much to look at. I have what I consider to be an incredibly rigorous set of criteria that has to be met to qualify as an "Unusual Suspect," and still I get at least a dozen candidates every day (today I got 18). If you're looking at everything, you're looking at nothing. The human brain can only focus on a few things.

  • Pavlovian Response

Every time the scanner dings, you get excited and think about making a trade. If you're looking at an intraday time frame like the three minute chart, you're going to start overtrading. You'll be generating a lot of commissions and very little profit, if any.

  • Liquidity Issues

I use the scanner to find "Unusual Suspects" in real time. They are generally low float, micro-cap junk stocks that are on a tear, (or they are bigger stocks that have been hit with news, good or bad (earnings, FDA decisions, etc.)).

The trouble with the low float, micro-cap junk is that after the initial burst of activity, volume dries up and there's no way to exit your position in a graceful way, even if you're on the right side of the market. You get stuck. And I mean stuck at a profit. It isn't as simple as crossing the spread and getting out. If you have 10,000 shares of a dollar stock, or more likely tens of thousands of shares, you just can't exit without tipping your hand, and they'll move the market away from you fast. It's frustrating. 

  • Dependency Issues

It's possible that you may shape your whole trading strategy around the scanner and grow overly dependent on it. I like to think that everyone should strive to be able to trade profitably while still using an old 14" cracked laptop on a dial-up connection from the Australian Outback.

  • Unnecessary Expense

I've always thought that your broker should supply you with a first-rate market scanner, gratis. My broker, IB, does have a pretty good market scanner, but it's nothing like Trade-Ideas, not even in the same league. Schwab probably uses the old CyberTrader technology for their scanner, but I really don't know. Fido, Schwab, TD, IB, etc. should all license the Trade Ideas technology and offer it to their "pro" users for free.

I might think of some more things later and update the post, but that's it for now.

 

Impressions After Sending My Son To Nerd Camp

Added on by C. Maoxian.

My son is doing a three-week-long robotics camp this summer in Maryland, organized by Hopkins' Center for Talented Youth. I just sent him to the camp yesterday and wanted to record my impressions before I forget them.

I estimate that 90 out of 100 campers are ethnically Chinese. Another 5% are Indian ("subcontinent, not Injun," as my friend Carl likes to say) and 4% are Jewish. This leaves a sad and beleaguered 1% of WASP attendees. The lopsidedness was shocking.

It makes me suspect that the Center for Talented Youth isn't interested in identifying exceptionally smart kids from all backgrounds, but instead is filled with bright kids who happen to have pushy parents who are trying to get their little darlings an edge, at any cost. Anybody with money can sign their kids up for prep courses or get their kids tutors who can help them pass "above grade level" tests. I thought CTY was all about finding weirdly brilliant kids, untutored, of any race, from all over the country, and all kinds of different circumstances. Looking around the campus on drop-off day, I was wrong.

I think Chinese parents must see CTY as some kind of backdoor into the Ivy League, and they might be right that it is, for now. But the overwhelming number of ethnically Chinese kids in the program makes me think that Hopkins is going to have to start limiting them in some way, a quota system perhaps, not far in the future. Striking a balance is going to be a very tricky thing. 

Notes for Chat with Traders, Episode 102

Added on by C. Maoxian.

Episode 102 ... Eugene Soltes (86:41)

  • His book, Why They Do It: Inside the Mind of the White-Collar Criminal
  • [Is Soltes another spelling of Soltys? (a Polish Jewish name)]
  • Professor at Harvard Business School .. finance, accounting, eight years on faculty
  • Had aspirations to be a trader
  • Econ undergrad, Masters in statistics
  • Worked at UBS, exotic options
  • Got a PhD, Great Financial Crisis hit, went into academics
  • MSNBC show called "Lockup" inspired him
  • Wanted to hear from white collar criminals, not violent criminals
  • Wrote to former Enron and Tyco executives in jail
  • Wanted to understand their perspective
  • Steven Richards, Global Head of Sales of Computer Associates, wrote thoughtful letter in reply
  • "Subtle fraud" ... backdating contracts to prior quarter, eight CA execs went to prison
  • Understanding the psychology of fraud
  • 90%+ of people he wrote to, responded
  • "the challenging part of their lives" .. he means being imprisoned, Soltes big on euphemisms
  • Spent a lot of time with Bernie Madoff, mastermind of largest Ponzi scheme in history
  • Bernie came from nothing and built an innovative brokerage firm
  • Madoff former Nasdaq chairman, highly respected and admired, SEC frequently called him for advice
  • Madoff one of the first to purchase order flow
  • Allen Stanford was $5BB fraud, big but a fraction of Bernie's
  • Madoff knew many of his victims ... all close within the Jewish community
  • Madoff rationalization for the Ponzi scheme, kept doubling down on a "capital violation" -- what a nut
  • $50BB+ in money under management at Bernie's fund, over a decade of no activity, just Ponzi payouts
  • Said he was earning 8-12%, any redemption he met with fund inflows
  • Very few redemptions because the stated returns were so amazing
  • People begged Madoff to get into the fund
  • 2008 the jig was up, redemptions exceeded inflows
  • Any sophisticated investor could instantly see it was a fraud, the returns were completely unrealistic
  • A lot of people looked the other way, wanted to participate in fraud not realizing it was a Ponzi
  • All his false positions were in tiny, illiquid markets ... just made no sense given his size, obviously ridiculous to anyone who spent ten seconds with the numbers
  • Can buy Madoff bogus statements on eBay now
  • Bernie just made a "series of mistakes," a charming guy, very smart and clever
  • Regulators overlooked all the red flags
  • Feeder funds aggregated small investors' money, sent to Bernie
  • Suing investors who took money out of the fund to pay people whose money was left in the fund
  • 2006 SEC deposed him about front-running his brokerage business orders; he wasn't doing this
  • Was so inconceivable he was a fraud (highly respected), regulators didn't look hard enough at him
  • Bernie and sons decided to alert regulators in the end
  • First impression of Bernie: cordial, whip smart, great memory
  • Bernie is "distantly aware" of what he did wrong
  • Madoff unusually calm in prison, taking it in stride [because he's a sociopath]
  • Michael Rand, chief accounting officer, at Beazer Homes
  • Housing boom, housing bust
  • Cookie Jar Accounting ... not over-reporting earnings, but under-reporting earnings, "over-reserving"
  • Unusual case where Rand was *under-reporting* earnings during housing boom
  • Five years in prison for under-reporting earnings
  • Managing the Street's expectations
  • Shop around for estimates that work best for you
  • Pension assumptions also all over the map, underfund pensions to maintain earnings
  • Insider trading -- using confidential information to make trades
  • Capital One employees correlated their credit card database with company sales, e.g., Chipotle sales boom, made trades based on their analysis, caught and went to jail
  • Two credit card companies do sell their aggregated data to hedge funds
  • Satellite data of store parking lots, car counts -- valuable data
  • Private helicopters fly over oil reserve fields to make estimates -- valuable data
  • Expensive data sources give these insights ... info legitimately acquired
  • Challenge to identify victims of insider trading
  • McKinsey exec Rajat Gupta tipped another Raj info he learned at Goldman Sachs board meeting
  • Received "friendship" from Raj, "fuzzy" benefit, no money, still convicted
  • Perpetrators very distant from victims so they don't feel bad about it
  • Prison is nasty ... dirty, cold, and loud ... rich guys still suffer that
  • Every white collar criminal he interviewed in prison was not remorseful, only troubled by missing family events
  • Nav Singh Sarao, flashing and spoofing very common
  • Tom Hayes, LIBOR scandal ... individuals as scapegoats for institutional problems
  • www.eugenesoltes.com
  • Twitter: @eugenesoltes

Notes for Chat with Traders, Episode 103

Added on by C. Maoxian.

Episode 103 ... Dave Bergstrom (55:32)

  • Realized he didn't want to go to law school halfway through undergrad
  • Father worked for Del Monte foods
  • Thought he could get rich quick by trading
  • [Sounds like a southerner or Texan?]
  • Got into trading around, just after, Great Financial Crisis
  • Always been a hustler, used to sell counterfeit sports jerseys, saved some money
  • Dad gave him $2,000 
  • Loved to draw lines on charts when he started
  • Traded options using technical analysis when he started
  • Would make money then give it all back
  • Need to trade consistently to see if you're able to "escape randomness" 
  • Lives in Florida, works for HFT firm, initially a trading assistant, lucked out getting the job
  • Taught himself how to program in Excel at first
  • Looking for edges in the data
  • Learning process went on for years
  • Need to test everything, can't just say something is "bullish" or "bearish," can't be subjective
  • Read "Evidence-based Technical Analysis
  • Moved away from chart patterns, too tough to program and test
  • Technical analysis not concrete enough
  • To move from trading assistant to trader, he needed to know how to program
  • Learning to program the best trade he has ever made
  • Programming is a super power, find the data and test it instantly
  • Read textbooks, watched YouTube videos, used Coursera
  • C++ the language to learn
  • Talked to HFT firm's programmers all the time, lucky he could study on the job
  • First learn how to read in data and build a technical indicator from O,H,L,C data
  • Look at several different resources to help things click
  • Find people you can ask questions of when you get stuck
  • Aaron recommends "Stack Exchange" to find answers to questions; Dave uses it "daily"
  • First language you should learn is Python -- clean, simple language, lots of free libraries
  • Machine learning background preferred
  • "Fitness Function" -- run a search program for 2.5 profit factor, for example
  • Think of "edge" as positive expectation, "positive expectancy"
  • Doesn't want to give away "secret sauce"
  • Every rule in a strategy requires a minimum number of trades (hundreds) to test
  • Allow law of large numbers to play out, must flip the coin a thousand times
  • Split up in and out of sample data (default 35% out of sample)
  • Two things he likes to look at: volume and volatility
  • Three key points that turned his trading around, he had unrealistic expectations [other two?]
  • Learned about Monte Carlo simulations, recalculate the equity curve for each shuffle
  • Must create realistic expectations in the beginning
  • Where do you expect to be in the next 'n' trades? What's the distribution?
  • Simulate variable win rates, don't just stick with one
  • "Randomness happens"
  • Three laws that he trades by:
  1. Risk to reward must be asymmetric, prefers trend following to mean reversion
  2. All bets mean the same thing to your bottom line, bet sizing must be consistent for the math to play out
  3. Make the law of large numbers work for you, edge must play out over thousands of trades
  • Discretionary traders who size up on certain trades are doing themselves a disservice
  • Trading should be boring, never exciting
  • Why bet five times your usual size on the eighth coin flip?
  • Dangerous to get an existing idea to trade more by dropping to a lower time frame, for example
  • Transaction costs for retail accounts make it impossible for law of large numbers to work out
  • Latency aribtrage has a bad rap
  • Trading is tough, HFT a scapegoat (but he's biased)
  • HFT beneficial, they do nothing predatory
  • Heyday of HFT over, very difficult now, strategies exposed, people jump from shop to shop
  • Has software he will license to the public, trading strategy search 
  • www.buildalpha.com
  • Twitter: @Dburgh

A Song That Changed Me

Added on by C. Maoxian.

Reminded of this great Mazzy Star song while watching episode seven of Gypsy. God bless Hope Sandoval, an honest-to-god dream girl, and her backing band with slide guitarist. No live version so I'm forced to embed this.... 

Mazzy Star "In The Kingdom" Lyrics Track 01 of Seasons Of Your Day (2013) I took that train into the city You know the one that goes under the bridge I thought I was listening To a band play a song that changed me Hey hey hey hey hey hey

Notes for Chat with Traders, Episode 104

Added on by C. Maoxian.

Episode 105 ... Alex AT09_Trader (58:11)

  • Recorded November 16, 2016 [date for context on shipping stocks discussion]
  • First saw DRYS when it went from $8 to $16
  • Did not have borrow on DRYS so didn't "get balls squeezed"
  • Low float stock with SSR (Short Sale Restriction), no selling pressure
  • Traded sympathy plays TOPS SINO
  • Forced to cover SINO (2.8MM float), could have blown out on that one alone
  • Garbage companies looking to raise money
  • Shorts get trapped, causes "float rotation"
  • Terrified to buy because fliers get halted
  • Lost $40K in EGLE, 35,000 shares with $7s average, could have lost a lot more if didn't get out
  • Dad came from Turkey to US in 1980s, entrepreneur at heart, hard worker
  • Dad made a lot of money in the electronics business
  • Dad put his money in the stock market, blue chips
  • 2008, Alex was 15 or 16, Dad's business fell apart, no more money
  • Sold car's wheels for $2000, put money in TD or eTrade account
  • Found a penny stock guru 
  • Lost all his money following guru
  • Got a job at Starbucks, tried stock market again with meager savings
  • Joined a new chatroom where he learned about shorting, "lightbulb went on"
  • Put money in offshore broker, 6x intraday leverage, avoid pattern day trader rule, prayed it wasn't a scam
  • Shorted VGGL from $4 to $3.50, felt euphoric
  • Shorting became everything to him
  • Blew up small account five or six times, shorting indiscriminately 
  • Shorting trash stocks worked, evolved to shorting sympathy plays
  • Sympathy plays you can find the borrow and it's cheaper
  • Thinks Pattern Day Trader rule is stupid
  • Girlfriend broke up with him, allowed him to save money, obsessed about market instead of her
  • 22 years old, been trading for three years (in Feb. 2017)
  • He's addicted to trading, on his mind 24-7, constantly planning his trades
  • Doesn't sleep much at night
  • Checks pre-market gappers
  • Closely watches pre-market movers
  • Writes down a plan for the day
  • Figures out support and resistance for each stock he plans to trade
  • Puts orders in above, hopes for spikes up at open [sounds risky]
  • By nature incredibly stubborn
  • Struggles to cut losses fast, would be a millionaire already if he didn't stubbornly hold losers 
  • Tried using stop losses, but always gets stopped out at the top
  • Now stops out half, and re-adds if it reverses
  • Never sets pre-determined amount he's willing to lose
  • Doesn't look at his P&L in real time
  • Loves taking risks in any situation
  • Adds to losers "where it makes sense"
  • Don't cloud your judgment by saying you suck, you're an idiot
  • Have to be able to re-enter quickly despite the loss you just took
  • Now with his big account, he can throw out feelers into parabolics and add on the way down
  • Grew $5000 account through consistent days, slowly but surely, showed up day after day
  • Now he tries to find perfect opportunities, tries not to trade every day
  • Some chat rooms have 1,000 person base ... whatever they buy, it instantly goes back down
  • Ideal set-up is sympathy play, trapped shorts, causes parabolic rise, when main play reverses, hit sympathy play as hard as he can (10,000-50,000 shares), hold for several days, or as long as possible
  • Toxic companies need to raise money
  • Bleeding doesn't stop in one day ... wait a few days, be patient for the "hard money"
  • After a day or two, people move on to the next stock du jour, forgotten stock sells down down down
  • Uses VWAP as his tell for reversal
  • Ebola and forklifts both gave good sympathy plays
  • Uses Twitter to pick up on what people are talking about
  • He's 99% short, 1% long
  • Sometimes he gets long when his short position doesn't work out, reverses himself, but that's rare
  • His friends have no idea how much money he makes
  • 22 years old is the time to take risks, no bills, no mortgage, lives with his Dad
  • Doesn't spend much money except for going out on the weekends
  • Doesn't want to show off
  • Open book about his numbers with any fellow trader because they'll understand
  • Bought foreclosure house to flip
  • Contractor nickel and dimed him, crooked guys, other annoyances, but not super difficult
  • Missed trading during the house renovation project
  • Low-float plays came back just after his house sale
  • Need a good, trustrworthy honest team to do real estate, can't get screwed at every turn
  • Learned you don't need nice kitchen appliances or countertops in a crappy neighborhood
  • Learned you can't go super-cheap on the bathrooms
  • Grow your small account by trading your single set-up consistently
  • Little things add up and it happens faster than you'd imagine
  • www.investorsunderground.com/AT09/
  • Twitter: AT09_Trader

Notes for Chat with Traders, Episode 105

Added on by C. Maoxian.

Episode 105 ... Brendan Poots (58:00)

  • Family in Perth, but he's Irish
  • Bet size versus volume of bets taken per match very important (bet sizing)
  • English Premier League match has average pool of $10-$20MM , AFL (Australian Football League) only $300,000
  • Bet size must be proportional to pool, must focus on liquid sports 
  • There are only a few global sports betting exchanges
  • Advent of in-play sports betting, basically real-time now, not a binary outcome anymore
  • Win lose draw ... must consider the draws in many sports
  • Money comes in towards kickoff, odds tend to be farther off before then
  • "Having a bet" is an Irish tradition, "the joys of punting"
  • Studied chemical engineering in University
  • Played cricket in England, his sponsor was a bookmaker. he worked nights for him
  • Couldn't cut the mustard as a cricketer, switched to investment banking
  • 2006 got scholarship to Columbia U., got his MBA
  • Didn't want to be lackey at age 33 in investment banking [also true for me with an MBA at age 30 after dot com bust]
  • Plus no jobs after Great Financial Crisis
  • Understood BetFair, 2008-2009 started building his own sports betting business
  • Made money on his own with sports betting, built short track record
  • 2010 raised some money and started his "sports hedge fund"
  • Individuals now give him several hundred thousand dollars a pop to manage
  • Started out as a punter but quickly morphed into strategic betting
  • "Betting" "Gambling" "Investing in Sport"
  • Has offshore office in Gibraltar, AIFMD regulated
  • Australia-based fund, small fund, number of investors limited, investors must have $500K+
  • Everyone got hit in Global Financial Crisis, but sports betting uncorrelated, immune to crisis
  • Lot of smart people in financial world, tough to compete, esp. if you lack passion
  • He lacked motivation and passion for finance, but loved sports
  • He's obstinate and likes proving people wrong
  • He's good at compartmentalizing his loves, driven by numbers and opportunity, not emotionally invested in any one team
  • First investors were friends, but still had to capital-guarantee their investments 
  • Sports betting is no longer a binary outcome
  • Betfair, Matchbook
  • Bad month -1%, good month +4%, he has taken the volatility out of it
  • Cherry picks the trades he makes, only acts when he can capture big premium
  • 95-97% of his trades are hedged, will act in real time to offset bet
  • Typical trade lasts 15 or 20 minutes, by end of game he's long gone
  • Psychological aspect of taking your profit and running, plus the risk/reward ratio changes after first goal (for example)
  • Doesn't touch basketball (injuries throw off data)
  • Markets overreact to injured players, presents opportunity
  • European fund denominated in GBP
  • Need more than a smart statistician or mathematician, need one with an innate understanding of the sport
  • Need to understand momentum shifts in sports
  • AFL too small a market, just can't play it, liquidity isn't there, can't hedge, can't exit
  • His analysts don't trade and his traders don't analyze
  • American gamblers used to binary outcomes, don't get the hedging concept
  • Needs at least 25% premium (his price vs. market price) in marketplace for him to get interested, a.k.a., Ben Grossbaum's "margin of safety"
  • Trials trading strategies, builds database, backtests it against old results
  • Historical sports data is a commodity, easy to build a model
  • Real-time data you have to subscribe to
  • Ball possession used to be considered a useful statistic, not true anymore, just noise
  • People want to see volatility-adjusted returns, "number of negative months"
  • Match fixing, spot fixing still happens ... incentives not there at high levels of sport, just low levels
  • "Tennis players at low levels scratching around for a living"
  • Three things you need to know to get into sports betting: 
  1. there's always another race 
  2. bet what you know and understand
  3. if you want to make money, do it in a boring way, slow and steady
  • His typical bet size is very small -- single trade max 3% funds under management (bankroll), typically 1 to 1.5%
  • Hit singles, not home runs (which are hard to find)
  • www.priomha.com
  • Twitter: @priomha

Life Without Global Internet Unimaginable

Added on by C. Maoxian.
Beijing has ordered state-run telecommunications firms, which include China Mobile, China Unicom and China Telecom, to bar people from using VPNs, services that skirt censorship restrictions by routing web traffic abroad

I lived in Beijing from May 2005 to July 2015. The main reason we left was the deadly air pollution, but a contributing factor, and not an insignificant one, was the tightening grip the State had on the Internet. I first began using a VPN in China after Twitter got blocked in June of 2009? (if memory serves). More and more sites got blocked over the following years making it essential to have a VPN, with Gmail being "the last straw" for the few remaining VPN holdouts when it got blocked in early 2015? (again if memory serves).

I cannot imagine living in China and not being able to access the global internet. I certainly wouldn't consider living there now, or even doing a semester of study abroad there, without unfettered access to the global internet (via a VPN). Maybe that's what Xi wants? 

Notes for Chat with Traders, Episode 106

Added on by C. Maoxian.

Episode 106 ... Turney Duff (76:04)

  • Wrote a book called "The Buy Side" in 2013
  • Consulted on the TV show, "Billions," tries to make dialogue and situations more authentic
  • "A Story of Spectacular Excess" the subtitle of his book
  • Grew up in small town in Maine, wood-stove heated house, in the 1980s
  • Three older sisters, simple way of life
  • Went to Ohio University, journalism major, 970 SATs
  • January 1994 moved to NYC, $1,400 in the bank
  • Thought he'd get a job at a magazine
  • Thought Goldman Sachs was a fancy department store
  • Had an uncle (Tucker) in the business, got him 10 job interviews 
  • Had one suit from Filene's Basement
  • Interview at Lehman, saw the trading floor, reminded him of a casino, it was intense, he was hooked
  • Got an offer at Morgan Stanley, PCS, Private Client Services, sales assistant job
  • Lots of admin bullshit, but learned a ton, loved his job, there for five years
  • Bulk of clients were high net worth individuals ($10MM-$100MM)
  • [Duff has a great smoker's voice, wonder how many packs he smokes a day? Newports, he says]
  • Got a call from Galleon Group because they needed a sales assistant, they knew him from Happy Hour
  • $300MM hedge fund in 1999
  • "Expect to be fired every day; it's a good day if you're not"
  • Low man on the totem pole
  • Insider trading was the norm in 1999
  • First year Galleon up triple digits
  • Wouldn't take the time to get to know any new analyst since most would leave within two weeks
  • Gary Rosenback head of trading desk, #2 behind Raj Rajaratnam
  • David Slaine, "dream informant" ... took down 30+ people in insider trading scandal
  • Raj was happy-go-lucky, but capable of extreme wrath
  • Raj would create rivalries between two like individuals in the firm
  • Raj arrested Oct. 16, 2009, sentenced in 2011
  • Appease the public after Wall Street bailout by taking down insider trading rings
  • Galleon's phones were tapped
  • Drugs and alcohol consumed his life, he was "all about the party"
  • One and half year's into Galleon, went from assistant to head trader
  • Later went to Argus
  • He was good at gathering information, making new relationships
  • Take emotion out, you become a better trader
  • First big trade -- shorting Sepracor (buying puts) on generic Prozac news
  • Made a million in 20 minutes in Sepracor
  • Analyst told him hospitals don't hire nurses anymore, it's all contract work through staffing companies
  • Bought a slew of staffing companies, then told handful of buddies about the trade
  • Lots of upgrades, made a ton of money, made sellside guy a hero (he was ahead of the Street)
  • Fellow buyside buddies also made out -- general good cheer all around
  • 2003, he's 33 years old, doing  $50-$60MM a year in commissions, sellside anxious for a share of it
  • Sellside had unlimited expense accounts, any restaurant, any bar, any sporting event, any film festival, any private jet travel
  • Scoring drugs or hookers together with a broker is a bonding experience
  • Spend $10K on the kid [him] a couple of nights, it's worth a million in commissions
  • Do entertaining off the books, no paper trail
  • Thought if he had one more steak dinner or martini, he'd explode
  • Would buy 200,000 SPYs from someone just to get out of going to dinner with them
  • Life of the party, a fun guy 
  • First time he did cocaine, he was thrilled (but sensed it could become a problem), felt that good
  • Drugs, sex, money, alcohol, power -- all mixed into a cocktail that's hard to refuse
  • Took two years before he was using cocaine weekly, then later it became daily
  • Cocaine mainly came from sellside, only had to pay $200-$300 a week out of pocket
  • Hookers once a week, $400-$2,000
  • Born in 1969
  • "Black hole of addiction"
  • Oct. 2006 feigned mugging by throwing self into puddle until bloody to miss work without getting fired
  • Made $1.9MM in his biggest year
  • Made $10MM over seven year period, mostly bonuses
  • "Jump ball" -- 15% of bonus pool up for grabs
  • Went from Golden Boy to forced into rehab
  • Hungover you don't "pick up as many lights" (answering calls)
  • Doing cocaine, you can't sleep, you can't stop
  • "New York, the city that never sleeps. Miami, the city that can't sleep" 
  • Can never match high of first line, feel fantastic for 15 minutes
  • Can never get feeling back later no matter how much you snort
  • Stored his coke in his sock drawer
  • Had a daughter with his girlfriend
  • Lives in middle of Long Island now, two miles from daughter, sees her daily
  • Pays $1,300 a month in rent, just getting by, trying to stay sober
  • Fatburger investment of $1MM a zero
  • Bought house at peak in 2007, $2.1MM put in $500K more, sold for $1.2MM
  • His old Manhattan apartment was 2,700 sqft, paid $9,300 a month in rent
  • Basically pissed away all his money, "living like an asshole for many years"
  • Made $22,000 a year at Morgan Stanley, thought if he made $50,000 all his problems solved
  • When he made $2MM a year, thought if he made $3MM all his problems solved
  • Money makes life easier, not happier
  • Look at your intentions versus your actions [sounds like rehab talk]
  • www.turneyduff.com
  • Twitter: @turneyduff

My First Successful Uber Drive

Added on by C. Maoxian.

As I mentioned before, I have begun to drive for Uber, sort of as an experiment in sociology and economics. I'm not sure how long this research project will last, but I'm willing to give it a few weeks or months of very part-time attention.

I turned on the driver app for the first time yesterday and accepted a request. When I arrived at the pick-up point, the kids said they had cancelled the Uber, but I said go ahead and get in since I was just learning the ropes. Uber charges people $5 for a cancellation, and the driver collects $3.84? of that (will have to check the exact number).

Today I turned on the app and accepted a request, which again got cancelled just as I arrived (and a cab pulled up) -- another $3.84. The next request I accepted, I messed up starting the journey on the app at the pick-up point, and totally botched that trip which resulted in *no* money, but it was a short jaunt and a small price to pay for figuring out how to operate the app in real time.

The third request I accepted, I worked the app correctly, and took some kids from the airport to a rental car office. The details from that trip are in the screenshot below ... it looks like you get around $1 a mile, which ain't great, certainly less than I expected ... I will have to collect a larger data sample before I can conclude that it doesn't make economic sense to drive for Uber.