Joey Anuff – Dumb Money: Adventures of a Day Trader

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Exploring the Essential Features of “Joey Anuff – Dumb Money: Adventures of a Day Trader”

As you read this, five million Americans are day-trading. Not since gold was discovered in California have more people dropped out of their old lives and come running for the promise of a big score. For a time, Joey Anuff was among them. He has emerged-enriched, enlightened, and exhausted-to share his story.
        
In a marriage of Anuff’s own experiences with the brilliant investigative work of his Wired and Suck colleague Gary Wolf, Dumb Money explores and explains the world of day-trading as has never been done before. No strategy is too crackpot to try, no news break too dubious to play off, no so-called guru too shady, no online chat room too pathetic. Using the rhythms of a day trader’s typical day as its frame, Dumb Money is a dispatch from the front lines of the stock-market revolution, a brutally Darwinian battleground on which some become wildly rich and more become part of the body count. It is essential reading for online investors, off-line investors, voyeurs, concerned citizens, and adrenaline freaks alike.

Editorial Reviews
Amazon.com Review
Could it be? Is it possible that day trading–the hottest thing to hit the market since analysts started forecasting stock movements by the heft of Alan Greenspan’s briefcase–is simply a bait-and-switch that promises unlimited riches but delivers only aggravation? Joey Anuff, cofounder of the Suck.com humor Web site, certainly thinks so. With a literary assist from Wired magazine’s Gary Wolf, he takes us into the belly of the beast in Dumb Money. And his rollercoaster first-person account of the day trading life graphically shows that while this highly romanticized world may be consistently exciting and occasionally quite profitable, it sure ain’t pretty.Set to the tempo of a trading day that begins each dawn in Anuff’s San Francisco apartment, the book chronicles an existence fueled by CNBC and Starbucks and has little room for anything else. Envious of the vast riches that everyone else seems to be accumulating, Anuff jumps into the abyss full-bore to the detriment of his personal life, his regular job, and even his sanity. Through witty writing and self-effacing irony, he shows why he stayed glued to his keyboard each day until the closing bell, repeatedly risking tens of thousands on stocks he couldn’t even recall a few weeks later. Along the way, he introduces us to several top players in the game, and explains how everything from discount brokerages to Web message boards affect the action. A true cautionary tale, it’s recommended for anyone who has ever read about a trader’s million-dollar day and seriously wondered, “Why not me?” –Howard Rothman

From Publishers Weekly
Literate day traders are bound to enjoy this brisk, canny account of one day in the life of young profiteer Joey Anuff, provided they can tear themselves away from their browser windows and news feeds. Anuff, who created the edgy humor site Suck.com and racked up a six-figure trading account when he made an early killing on eBay stock, takes us through the rhythms of the Nasdaq trading day as experienced from his San Francisco loft. With CNBC blaring in the background, we wake up to the blistering pace of morning trading, segue into the “midday dead zone” while hitting up a few novice-filled chat rooms, and then wait out the market close. Anuff peppers his real-time vignettes with reportage on the evolution of day trading, revisiting the scene of killer Mark O. Barton, whose rampage through the Atlanta offices of All-Tech Investment Group put day trading on the national radar screen, and harking back to legendary traders like Harvey Houtkin, “b?te noir of the NASD.” To his credit, Anuff explores the cliquish culture of veteran traders and explains plenty of insider babble from the Nasdaq exchange. Yet the book’s tone wavers between deliberate cynicism and paranoid delusion, which may be faithful to day-trading psychology but can make the narrative seem contrived. When Anuff concludes by renouncing day trading and its dumb money for a real life, one feels as though the persona of the mercenary, bug-eyed trader has been a bit of a swindle. (Apr.)
Copyright 2000 Reed Business Information, Inc.

From Booklist
This book is a Seinfeld-esque account of a day in the life of a day-trader who seems to be lacking a day job. Both funny and irreverent, the story manages to inform in a way that the more serious guides to day-trading that have proliferated do not. Anuff and Wolf combine to tell Anuff’s story; they show the psychological and emotional toll that day-trading can extract, and they make clear the risks involved. At the same time, the details on how decisions are made and trades are transacted are quite instructive. Anuff is cofounder and editor of Suck.com, an Internet Web site devoted to humor. Three years ago he coedited Suck: Worst-Case Scenarios in Media, Culture, Advertising, and the Internet. In 1998, he sold Suck to Wired Ventures, and he is using his earnings to finance his day-trading, which averages 400 trades a month and has earned (so far, anyway) 200 percent returns. Wolf is a regular contributor to Wired magazine and the coauthor of Aether Madness: An Offbeat Guide to the Online World (1995). David Rouse

Review

Advance Praise for Dumb Money

“Joey Anuff and Gary Wolf have done the impossible: Dumb Money, an early-21st century crossbreed of Dostoyevsky (The Gambler), Matt Groening (Homer Simpson), and the Motley Fools, fully conveys the addictive, populist thrill of online stock trading, but also stands as a cautionary tale about a certain kind of life—twitchy, sweaty, lonely—on the internet.”
        — Kurt Andersen, author of Turn of the Century and co-chairman,          Powerful Media

“Read Dumb Money and never again will you worship at the shrine of day traders or most any other Wall Street or Web guru. It is easy to be irreverent, you say? Yes, but it isn’t easy to be funny, or wise, or to write so effortlessly. This is Bright Lights, Big City without the cocaine but with the highs felt when a writer captures a moment of mass insanity.”
        — Ken Auletta

“Dumb Money is the truest and most entertaining book about the allure of seemingly easy money since Edwin Lefevre’s classic, Reminiscences of a Stock Operator. Fusing a riveting and often hilarious personal narrative with a contemporary history of the rise of day trading, Anuff and Wolf cut through the frustrating mix of hype and horror that envelops most writing about the stock market. This is a clear-eyed and painfully honest book, and ultimately a moving one as well. Day trading is now responsible for at least one good thing.”
        — James Surowiecki, Slate.com

From the Inside Flap
u read this, five million Americans are day-trading. Not since gold was discovered in California have more people dropped out of their old lives and come running for the promise of a big score. For a time, Joey Anuff was among them. He has emerged-enriched, enlightened, and exhausted-to share his story.
        
In a marriage of Anuff’s own experiences with the brilliant investigative work of his Wired and Suck colleague Gary Wolf, Dumb Money explores and explains the world of day-trading as has never been done before. No strategy is too crackpot to try, no news break too dubious to play off, no so-called guru too shady, no online chat room too pathetic. Using the rhythms of a day trader’s typical day as its frame, Dumb Money is a dispatch from the front lines of the stock-market revolution, a brutally Darwinian battleground on which some become wildly rich and more become part of the body count. It

From the Back Cover

Advance Praise for Dumb Money

“Joey Anuff and Gary Wolf have done the impossible: Dumb Money, an early-21st century crossbreed of Dostoyevsky (The Gambler), Matt Groening (Homer Simpson), and the Motley Fools, fully conveys the addictive, populist thrill of online stock trading, but also stands as a cautionary tale about a certain kind of life–twitchy, sweaty, lonely–on the internet.”
— Kurt Andersen, author of Turn of the Century and co-chairman,Powerful Media

“Read Dumb Money and never again will you worship at the shrine of day traders or most any other Wall Street or Web guru. It is easy to be irreverent, you say? Yes, but it isn’t easy to be funny, or wise, or to write so effortlessly. This is Bright Lights, Big City without the cocaine but with the highs felt when a writer captures a moment of mass insanity.”
— Ken Auletta

“Dumb Money is the truest and most entertaining book about the allure of seemingly easy money since Edwin Lefevre’s classic, Reminiscences of a Stock Operator. Fusing a riveting and often hilarious personal narrative with a contemporary history of the rise of day trading, Anuff and Wolf cut through the frustrating mix of hype and horror that envelops most writing about the stock market. This is a clear-eyed and painfully honest book, and ultimately a moving one as well. Day trading is now responsible for at least one good thing.”
— James Surowiecki, Slate.com

About the Author
Joey Anuff ([email protected]) is co-founder and editor in chief of Suck.com, the Web’s pioneering daily humor Web site. He lives in San Francisco.

Gary Wolf ([email protected]) is a regular contributor to Wired and other magazines and the author of the forthcoming book Bengali Ty-phoon: The Rise and Fall of Wired Ventures. He lives in San Francisco.

Excerpt. © Reprinted by permission. All rights reserved.
INTRODUCTION

These are the years of opportunity. In the late-afternoon sunshine of the twentieth century, good fortune has beamed down obligingly on equity owners everywhere. Rarely have capital gains been so easy.

Some people had the good luck to be born in a tropical paradise before European conquest. Some had the luck to be born wealthy in an enlightened age. It was my destiny-the equivalent, in contemporary thinking to genius-to reach adulthood at the beginning of the most phenomenal bull market ever known.

At least I know enough to be grateful. I have earned little, but I have been denied less. Among the beneficiaries of unearned wealth, I rank, if not first among equals, squarely in the middle of the graduating class.

This is my story.

It is not a story about Wall Street. The image of a street is an inaccurate metaphor for where my form of wealth creation takes place. Wall Street, from its earliest days, was a kind of a club, with membership regulated by an evolving administration of gentlemen devoted to monopolizing the easy money. in exchange for guaranteed wealth, they undertook to bring order to the market.

With the help of the government, they succeeded. Since the Roosevelt administration, regular crashes and depressions have been tamed by close collaboration between Washington and Manhattan. This alliance has blessed us with deposit insurance, the Federal Reserve Bank, and the Securities and Exchange Commission. It gave us a set of dull and restrictive laws that enforced separation between the insurance industry, retail banking, and speculation in the financial markets. It gave us mutual funds, prosperity, and a stable post-war system.

And that, my friend, is the last of you’ll hear of any of those virtues from me.

Many years ago, the New York Stock Exchange attempted to lure crash-wary small investors into the market with a patriotic campaign. “Own your share of America” was the slogan. “There is no stock exchange in Moscow,” added G. Keith Funston, the president of the Exchange, “nor is ownership of promising enterprises in Russia available to the public.” Funston’s hope was that democracy would be safer in the hands of people who had pride of ownership in capitalist enterprise. This was the altruistic motive. The pecuniary motive was expressed by fixed trading fees of as high as 12 percent.

This situation has evolved somewhat in recent decades. For one thing, trading costs have plummeted. Also, nobody needs to be reassured anymore about the moral legitimacy of stock ownership. Patriotism, having served its purpose, no longer intrudes. It is just as well. In my view, which I take to be the majority opinion, the only reason to own your share of American enterprise today is to sell that share to somebody who is just a little bit more eager than you to bet on its future.

To understand what I have to say about day trading, it is important to get into the right frame of mind. When you think of stocks, do visions of companies and products float into your head? Does Nike mean running shoes? Does McDonald’s mean hamburgers? Does Microsoft mean computers?

You must break that habit. Purge these associations from your memory banks.

It won’t be easy. The day-trading environment is designed to confuse. That interview with the beefy, shifty-eyed metals-industry executive on CNBC suggests that there are people and products behind the symbol on your desktop, that somewhere tropical heat bare-chested exfarmers are digging metal deposits out of ex-forests. This may in fact be the case, but it has nothing to do with you. The chart of the mining company’s stock, if extended back far enough, tells a complicated story of its long-term relationship with its workers, its customers, and its investors. But remember-you are not a worker or a customer. Unless things go very wrong, you are not an investor, either. Nothing causes day traders more amusement than evidence of a core group of believers married to the stocks they buy. By married I mean they keep their shares through thick and thin, in sickness and in health, for richer and for poorer.

To follow this story, you will have to gain mastery over your common sense, and learn to scorn the reality you are conditioned to think controls stock prices. You must not fear delusion and mania. As one well-known hedge-fund trader wrote recently, “The toughest thing in the world is to not blow out of an overvalued stock that is up 10. That is the definition of discipline in this market.”

Finally, if you want to experience the glories of the new stock market, even vicariously, you need to have its main rule inscribed not just in your brain but in your stone-cold heart. Here is the rule: You are not an owner. You are not an investor. You are not an employee, customer, or stakeholder. You are not a patriotic American waving the flag, glad to go long in the name of freedom. You are only in it for the money.

There have always been pipsqueak brokerage customers who hustled for an inside line on a sure thing, or plunged their entire account plus margin on a tip about tomorrow’s news. But the bull run on the Internet has produced an obsession with speculation that has no equal since Joseph Kennedy noticed in 1929 that the shoeshine boys were offering him market tips. All across America, people of limited means and intelligence have gotten rich buying and selling companies like Yahoo and eBay and Amazon.

We live in an era of unprecedented opportunity for unearned riches, and nobody can ignore the fact that if they don’t grab for the

Dumb Moneygold ring now, the merry-go-round might jerk to a stop before they get another chance. it is already possible to look back with devastating hindsight. If I’d only put ten thousand into America Online stock when I first opened my account, goes the internal diatribe, I’d already be a millionaire.

Thousands of unremarkable people have already become ultrarich. Last year I finally woke up to the Big Question.

Why not me?

CHAPTER 1

VISUALIZE MONEY

Dawn-4:50 A.M. Pacific Standard Time

I am in bed, but I’m not sleeping.

Things could be worse. I could be long.

There was a time when I would hold a position overnight, but I found it destroyed even the distant dream of shuteye. Mornings are bad enough without wondering if I’m going to start the day screaming obscenities at my computer screen as the shorts go bonkers dumping some scandalous POS I was stuck with at yesterday’s close. POS is one of the many acronyms that have come to pepper my speech in the year since I became a day trader. An IPO, for instance, is an initial public offering of stock, perhaps in an Internet company with dwindling cash reserves and no profits. SEC stands for the Securities and Exchange Commission, a federal agency that does various things that remain obscure to me but that often figures in the stories of stocks I am following. POS is an acronym used with dismaying frequency on the Silicon Investor message boards by a stock guru named Anthony Elgindy, whom you will meet in a few hours-under less than ideal circumstances. POS refers to many of the stocks I make money on. Since this story is governed by the rules of full disclosure, I have to admit that POS stands for “piece of shit.”

My problem this morning is that without a position to worry me, I have trouble becoming alert. Every day I wake to the voices of CNBC, set to come on automatically at ten minutes before five A.m. And every day I have my first mini-panic right then, at the moment the lucidity of my predawn dream is replaced by the calmly alternating voices of Mark Haines and Maria Bartiromo, who seem like they’ve been talking to each other forever.

Wait, I say to myself, still too groggy for an exclamation mark but troubled all the same, how long has the TV been on? Have I missed the open? Did I oversleep? And it takes all the effort in the world to turn my head and look for a quote from the red numbers on my digital clock. It says 4:50:06. The TV has been on for six seconds. I have won my first victory over the numbers.

Attentiveness slowly builds from there. Lying in bed, I notice a sensation that is halfway between Christmas morning and the day of your first sphincterotomy, a creeping sensation not of alertness but of anticipation and anxiety. I couldn’t go back to dreamland if I wanted to. But I’m far from awake enough to make split-second financial decisions that will make me rich or ruin my life. In ten minutes or so, promarket trading will begin, and between now and then I have to remember how to cogitate.

If I were long overnight, thinking would be easier, but more painful. When I was an innocent new speculator, ten months ago, I would go to sleep with positions open, and my first thoughts of the day would be of multiplication tables. In the seventeen and a half hours between market close and the next day’s open, revolutions in perception are commonplace, especially in the volatile lowcap stocks where I’ve made my biggest money. All night long, the amateur traders battle on the Internet message boards, insulting each other and trying to pump the price up or down, depending on whether they are long or short. When I held my positions, I was motivated to follow the battle as it dragged on for days, and I would spring up each morning, eager to loam how fate had treated me. Instead of doing jumping jacks, I got revved by multiplying 1500 shares of YHOO by 2, 4, or 578 dollars.

But in the year gone by, I have grown up and put away childish things. These days, if I need to tabulate my folly I simply refer to the handy promotional mouse pad I got from a day-trading brokerage. The gimme pad features a grid showing the gains or losses on trades of 200, 500, 600, 800, 1000, 1500, and 2000 shares on stocks that move in 132 increments. No need to work excessively hard: here is the subtotal at a glance.

And anyway, I no longer need to calculate subtotals in the mor…

 
Product details
Publisher ‏ : ‎ Random House; 1st edition (April 18, 2000)
Language ‏ : ‎ English

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