Trade Without Guilt

was deeply saddened
by the events of Sept. 11, 2001, and now, days
later, am still affected. For one thing, I’m not sleeping well. I sleep for a
while, then wake up to the remembrance of the nightmare.
This is backwards; you’re supposed to have a nightmare while you sleep,
then wake up to find that everything’s OK!

My prayers go out to
the families of the victims, and to the nation. I
firmly believe that we’re going to have to ask for God’s help in the battle
that lies ahead, and this may require some repentance if we’re going to really
expect God to be on our side. This
country is far from perfect, and needs to make some changes.
Not that I believe that the events of that tragic day were somehow
designed by God to punish us or bring us low. But
as long as we’re low, we might as well take this opportunity to repent.
Of what, you may ask?

While the
destruction on Sept.11 was great, I would point out that in so many ways
Americans destroy themselves and the fabric of this nation on a continual basis
through substance abuse, violence, immorality, divorce, etc., on such a scale
that, I would suggest that the collective damage might, each month, equal that
of Sept 11. So for anyone wondering where
to begin repenting, this might be a good place to start.

Another might be to
begin governing our foreign policy based on principles rather than the almighty

I could go on.
But at this point I’ll switch my editorial to some words about trading. 

Some traders holding
short positions going into that fateful day have said that they feel guilty
about the gains they received. Some have
also said that they would feel guilty making money from the ensuing market

I’d like to say
that I don’t think any trader should feel guilty.
I myself had a short position going into the 11th, and when I
take my gains, I’m going to be thankful just as usual.
It is not blood money. I did not
betray anyone when I entered into the position. I
just got lucky, that’s all. (Note that
my 401K took a big dose of bad luck on the same day!)

Trading is a game of
calculated risks, and sometimes you take an unexpected big gain or loss.
C’est la vie.

A colleague in my
office suggested that traders with windfall profits might donate all or part of
their gains to the relief effort. That’s
a good idea. I may do that as well.
But I won’t be doing out of guilt. Guilt,
like so many other human emotions, is not appropriate in trading.
Nor is it appropriate in your charitable giving.

That’s why I’m
not going to be any different a trader in the coming days.
If anything, the market needs my speculative involvement just as much as
ever, for increased liquidity. The market
may fall further in the coming weeks. If
it does, I’m going to try to make money from it.
Or, it may rise. If it does, I’m
going to try to make money from it. A
trader acts in his own best interests. That’s
the basis of capitalism.

Some are even
calling for everyone to place all the buy orders they can muster to drive the
markets up and make a statement to the world. Sorry,
I won’t be committing suicide with my trading capital.
Hopefully you won’t either.

This brings me to
say a few words about the overall, ongoing bear market.
We hear from so many investors who are practically paralyzed into
inaction. Week after week, they watch
their stock and mutual fund values fall. Don’t
just sit there! If you would rather not
sell, then use options to hedge. I have
written about how to best use
options to hedge
a portfolio, and how to determine the appropriate number of
contracts needed.Meanwhile, let’s
carry on as usual. No guilt.
OK? (I mean, about sin, yes.
About trading, no.)