Anyone Can Be William Wallace

NOTE: This is an ongoing original fiction story that I’m currently writing. I started writing this fictional story back at the beginning of October 2020 and contribute ~500 words to it every day on this blog. I didn’t outline the story at all going into it but it’s slowly evolved into a tale about a data scientist in his mid-thirties from America who finds himself summoned to China where’s he’s been offered a job to work for the Chinese Communist Party on a project monitoring the Uyghurs in the Chinese “autonomous region” of Xinjiang. In China, the story’s protagonist, Dexter Fletcher, meets other professionals who’ve also been brought in from abroad to help consult on the project. My story takes place several decades in the future and explores human rights, privacy in an age of ever-increasing state-surveillance, and differences between competing dichotomies: democracy vs communism, eastern vs western political philosophies, and individual liberties vs collective security. If this sounds interesting and you’d like to read more, my fiction story starts here.

Chapter Five – Passage Two

“I’ve done more with less,” Van says delicately.  “Besides, I think we’ve got the right stuff here.”

She moves to the front of the lounge and pours herself a new mug of coffee.  For the life of me, I cannot imagine where this is possibly going.  Not to toot my own horn too much, but I consider myself a man of considerable imagination.  (Fan fiction, after all, is one of my strong suits.  North American Top 100, right here. ✊)  But even my own wide-ranging imaginative wonder is having some difficulty surmising how all this is going to come together.

“Generally speaking,” Van starts, “a population is vulnerable to authoritarian rule only under very specific conditions.  The easiest way to think about this is in terms of what the population in question needs.

“If the target population is destitute and living in abject famine, a totalitarian ruler will initially be able win over the people simply with food, fresh water, safety, and shelter.  In this first phase, no one cares about human rights, free speech, or democracy.”

“Sure,” Katherine nods.  “That totally makes sense.  You can’t eat human rights.  And democracy will not feed neither you nor your starving family.”

“The ability to really dig in and endure a long-running war of attrition is paramount too,” Van adds as she waves a beignet covered in powdered sugar around, picking it off the breakfast spread that’s on the folding table.  “Anyone can suffer or even die valiantly for the cause in the heat of the moment, going out in a blaze of glory that’s forever immortalized in memory and song.”  Van scrunches up her face for a moment, trying to remember something.  “Basically, that bad anti-Semitic man in that one Scottish movie.”

It takes me a minute.  “Wait, you mean Mel Gibson?  William Wallace from Braveheart?”

Alan snaps his fingers.  “That’s it!”  He gives a nod of approval, to no one in particular.  “You Americans do make really great movies though.  I’ll give you that.”

Coleman makes a face.  I can’t tell exactly what’s perplexed him.  (Probably, all of it.)  Also, he still has the thousand-yard stare of a young man on Cloud 9, after a hard night of one too many mojitos.

“Yeah, anyone can be William Wallace,” says Van shrugging.  “You just suffer excruciating pain for maybe ten minutes while your intestines are being pulled out, yell something memorable, die, and then you’ll be subsequently be made a martyr immortalized for time immemorial.  Easy-peasy.”

“Uh,” Coleman mumbles, “I don’t… that’s not so easy, actually…”  Poor kid.

“The point,” continues Van starting in on a second powdered beignet, “is that ‘flash-in-the-pan courage’ is nothing.  Every wanna-be Che Guevara’s got that in him.  What’s an infinitely heavier lift is asking a man to watch his small children starve and die slowly from starvation and malnutrition for weeks and months on end.  That’s the kinda sacrifice that most are unable to make.  That takes real conviction.  A conviction that precious few possess.”

I hold up my hands.  “Whoa.  Hold up.  Stop the Crazy Express.  I didn’t sign up for no ‘Operation-Starve-the-Children’ here.  That’s a big, fat red line for me.  Next idea.”

Lessons and Mistakes Learned in My 15-Month Adventure So Far

I posted on Reddit this Sunday afternoon:

Like Buffett says: “You don’t know who’s swimming naked until the tide goes out.” Meaning: In a rising market– everyone looks like a genius and posts monster returns. It’s only during a crash do we see what separates the professionals from the amateurs.

And full disclosure– for the past three weeks since Feb 21, I have been positively reamed from every which way in my positions (long AMD & MU). I’d started day-trading Jan 2019 (after being inspired by the show, Billions) and had been doing pretty until Feb 21 but the past three weeks have been totally humbling and has revealed to me that I am a total amateur. If I get out of this alive, I’ll know now it was completely luck and that I’m totally not a genius.

All that said, I thought I’d take this opportunity to share some hard-learned lessons I’ve learned these past 15 months. This stuff more applies to active traders (as opposed to investors, which is why I’m not posting this in /r/investing).

Humble Advice from a Beginner re Active Trading

  • Get proficient on the Quantopian platform. To be clear: I am in no way associated with Quantopian. I just use one of their free accounts for data exploration, pricing info, and analysis. But it’s really awesome; I regret not knowing it better before I started. Yes, you will need to know a little Python and Pandas (a programming language and a software library package) but it’s incredibly basic and easy to use. Eons ago, I was once a history major. If I can figure it out, so can you.
  • The market is difficult to time. Here’s the stat that is always tossed about: “If you missed the ten biggest up-days of the past xyz years…” As consequence: Know your time horizon and always have an “investment thesis.” As the ol’ saying goes: “Bulls make money. Bears make money. Sheep get slaughtered.”
  • Keep an eye on the VIX.
  • Keep an eye on “Wall Street Week Ahead” posts on /r/stocks. (I can’t believe I didn’t know about this sub sooner… I guess you don’t know what you don’t know… /u/bigbear0083 is a national hero; someone give this person a Nobel prize.)
  • And specifically– if you’re day/swing trading any specific stocks, follow the stock’s sub, if it exists. Eg. I just learned about /r/amd_stock a month ago and have been following it ever since. In particular– I wish I’d known about this post of catalysts last year.
  • Go straight to the source. The next two economic indicators I’m most paying attention to are the US Labor Bureau Stats and ISM numbers on April 1 & 3. (More on that at the bottom.)
  • Finally: (And again, just my humble 2c.) Get a wife. (Or a husband/life-partner, etc). YMMV on this one, but personally, it’s helped me tremendously. When you’re parked in front of your computer the entire weekend crunching numbers and scouring news, you need someone to feed you. Also, someone to periodically bug you to leave the apartment to go out for walks for fresh air. Marriage is net good.

Things I did Wrong

  • Use the candlestick charts; not just the line charts.
  • Deleveraging spills over, even into safe asset classes, during historic plunges. Three weeks ago, I kept huge positions in memory and semiconductors thinking, “Oh– if the market melts down from COVID-19, it’ll only be travel, movie theaters, dining out, etc. that plunge.” I had 100% erroneously thought that in a downturn, asset classes not directly affected would be shielded. I was totally wrong. What I know now, which I wish I knew three weeks ago, is that in a massive downturn, all asset classes will plunge. And here’s one major reason why: Investors, big banks are usually highly leveraged. When the pandemic hit, they took huge hits on the “losers” (airlines, oil, etc). In order to smooth out the losses from the losers, folks are forced to sell winners as they dramatically deleverage positions to cover margin calls/retain capital position. Therefore, even “winning” stocks/classes will be affected in a downturn. Maybe, in the long term, data centers/semis/memory/etc, may come out ahead. But none of that matters in the hyper-short term (on the magnitude of weeks). I made this mistake in my mental model. Never again. (If there is a next time.)

Things I did Right

  • Use a Roth IRA as a “pace account.” Put ETFs and some blue chips in here and then just leave it. Having a pace account allows you to easily compare how you’re doing with your active trading against your passive strategies at any given point in time.

My Personal Future Outlook (aka, Guess)

  • Again, I’m not a professional so take this with a grain of salt. But here’s where I think things are going: I agree with RBC: SP 2300 is the Maginot-Atlantic-Wall-Mason-Dixon-Rubicon. Either we hold this level (expecting a “garden variety recession”) or an utter bloodbath ensues. My personal belief (well, more like hope and prayer) is that we hold the line with intraday bottoms going as low as SPY (~232) which is the bottom we hit on Dec 26, 2018. (For reference, we ended Friday at SPY 269 but did sink as low as 248). We’ll find out next week; in particular, on Monday.
  • Last Wednesday, Trump gave the single most catastrophic Oval Office address I’ve ever seen. On Thursday morning, markets reacted accordingly. Friday’s Rose Garden address was better. I am now praying/hoping for sideways action until the ISM report on April 1 and Jobs report on April 3. Everything hinges on these two reports. (Btw, February 2020’s job report was absolutely spectacular. In fact, BLS actually revised Dec 2019 and Jan 2020’s numbers upwards.) Right now, I feel raw utter panic has gripped the country. People see barren aisles at Whole Foods and Trader Joe’s. They see five-hour queues at Walmart and Target. People can’t buy toilet paper and water…. etc. Schools are closing, NBA/NHL seasons are canceled. Movie releases are getting postponed. (God, even the mighty Vin Diesel, King of Coronas, couldn’t hold out against the Corona virus…) Etc.
  • My bet (hope and prayer) is the BLS and ISM numbers on April 1 & 3 won’t be as bad as people are expecting. If that’s the case, the market will absolutely rocket into the stratosphere. (I made this prediction several weeks ago and I’m holding to it.) I am personally guessing that we’re about to witness the shortest bear market in the history of bear markets and the fastest recovery man has ever seen. If there is contraction, I believe it’ll be very short-lived. (Maybe one quarter at most.) We’ll see. (I can elaborate more on my theory if anyone’s curious. But since this post is getting really long; I’m just going to omit that theory here.)
  • My humble opinion is that this panic is 100% overblown and we’re in an emotional nosedive right now. People think the sky is falling and there is no guidance of any kind right now to indicate how bad things will be. So everyone’s bracing for the worst. I saw some guy on Seeking Alpha yesterday proclaiming Dow ~17,000… (No link for him as I think he’s a complete nut. But I guess we’ll see who’s the fool… him or me…)
  • Futures open at 6p ET tonight. That’ll be the first indication of what next week may look like.

Good luck and Godspeed out there.

PS. This is hilarious.


Here are two pieces of advice I’ve found helpful.  The first is one I learned long ago, which has stuck with me for nearly a decade.  It’s never far from top-of-mind whenever I begin a new project.  The second is one I just heard this past weekend on Sam Harris’s Making Sense podcast interview where he spoke with Shane Parrish of Farnam Street.

One of my favorite stories that I find inspiring comes from the book, Final Jeopardy by Stephen Baker.  In the book, Baker recounts the origin story of IBM’s Watson– specifically back in 2011, how IBM conceived and executed the project.  The anecdote that’s always stuck with me is before they embarked upon this multi-billion dollar endeavor, IBM’s Watson team tasked a summer intern who’d just joined with the task of trying to create “Watson” with the most basic, off-the-shelf, open-source software that was commercially and freely available.  They timeboxed it to three weeks and simply let the intern, a bright fellow, I’m sure, wander off into the interwebs and do his thing.  The motivation behind this assignment was to develop a baseline not constrained by conventional thinking.  It’d be incredibly humiliating and embarrassing if the IBM team poured billions into Watson only to have it outperformed by a garage project some rando created in his spare time.

I’ve always found this story compelling because it champions a scrappy and resourceful mindset.  Forget all of the fancy tools, machine learning, expensive vendor solutions, etc.  You’re not always the King of England with superior firepower, vast armies of men, and overwhelming force.  Sometimes you’re Mel Gibson in Scotland and the only things you have are your own two bare hands and your wits.  Learning to build a lean, mean, fighting machine is a healthy approach and good for the human spirit.  After all:  “Necessity is the mother of all invention.”

The second piece of advice comes from Shane Parrish/Warren Buffett:  Choose a domain of knowledge that doesn’t change quickly (Eg. Not technology.)  This way you give your knowledge base a chance to compound and grow.  If you are working in a fast-changing domain, the ground is always shifting beneath your feet making it extremely difficult to build on your terrain of knowledge.

Parrish cites Warren Buffet as an example who, famously, for many decades shied away from technology because Buffett simply felt like he didn’t understand it.  (Now certainly, and by Buffett’s own admission, that ended up being a huge mistake and he left billions on the table, but that’s beside the point.)  Instead, Buffett focused his investments on consumer staples and things like rail transportation.  By focusing on just the few, slow-moving industries that he knew well, Buffett was able to make tremendous amounts of money.