I have never really been a risk taker with investing.
Sure, I would go to Las Vegas and throw $100 on a roulette table and bet it all on red, or I would throw $250 on a hand of Blackjack at the Red Rock Hotel in Summerlin as I was walking through…
But this wasn’t investing when I did it like that.
By and large, I even considered the stock market a game of chance.
But I had acquired a million in the bank by the time I was 30 by figuring out how to turn games of chance into an investment game of skill, having spent a great deal of time in Las Vegas winning against the house by developing strategies through computer programs I created which would help me increase my odds against the house as I tipped the odds dramatically in my favor through simple strategy.
By the time I had hit 30 years old, I had realized that every game appears to be a game of chance at first.
And the absolute key to turning any game of chance into a game of skill is by limiting your losses.
I had done this with Las Vegas style gambling by making one single rule and sticking to it: What I brought with me was all I allowed myself to spend. Once that was done, I absolutely refused to hit the ATM or go to the bank. Period.
I was so steadfast with this rule, I worked an entire year for the Mirage Hotels and not one time did I withdraw money from a bank or ATM while I was there.
It took me years to understand, psychologically, why this strategy was so incredibly effective in helping me ‘beat the dealer’, but work it did . By the time I stopped working in Las Vegas, I had developed consistent winning strategies for slot machines, for blackjack, for craps, and for Pai Gao Poker (a personal favorite).
It wasn’t until I was 28 that I opened up a Charles Schwab investment account.
And because I didn’t know the markets well at all, I only put what I was willing to lose on the proverbial table: $20,000.00.
By the time I hit 30, I’d sunk another $100,000.00 into the account, which had established me as a Charles Schwab’s ‘Private client’ which, while saying I had spent a great deal of money with them, it also gave me discounted trades and access to a broker immediately .
This was the start of my efforts of diversification.
But I’d always played it safe.
So in 2006, I started playing for the first time with futures in the form of shorts.
What a future is –is a nearer term expectation of financial movement in one direction or another of an underlying financial asset.
Stocks on their own are an asset which generally speaking an investor holds on to for the long term and you leverage the product or service the asset is attached to, and there’s an expectation that stock’s value will rise. In a general sense, it’s not advised to invest in stocks you yourself do not use or intend on using. That’s investment 101.
Futures, however, is a bet – a wager even – that the asset the future is applied against will either decrease or increase in value.
And what I was starting to see was patterns that futures can be VERY similar to the shuffle of the blackjack deck in Las Vegas.
At first I thought it was all about chance.
But I started seeing there was FAR more to this game of chance that simple chance.
By this time I had about $1.4 million in various brokerage and bank accounts by this point, and being a technical insider, I shifted $10 grand into a short position on a certain company I will not name that I suspected would not cope well with problems with their suppliers.
What this means, in plain English is – I was betting real money that the company’s stock would decrease in value, and if it did, I would actually PROFIT from their loss.
The stock performed exactly as I predicted it decreased $10 a share, about half the value of the stock, which I in turn profited $5,000 in a very short period of time.
Now had I screwed up with my prediction and the stock rose, defying my expectations, let’s say it went from $20 a share to $30. I’d be obligated to sell that stock at the lower price I’d locked in. Our financial system is based on trust, and this trust is actually reinforced legally through contract law, so I can literally be sued for the difference in price for not turning the stock over should I accumulate a loss and not follow through on my promise to sell the stock at the lower price.
But this system of shorting moved too slow for me. Sure, I made a couple grand here and there when I was right, and with my awareness of technology and supply chains I was right, fortunately, more times than I was wrong. But there was something missing. I was, in fact, bored.
About then I discovered leveraged futures through calls and puts with stock.
These things changed my life. Investors buy calls when they think the share price of the underlying security will rise or sell a call if they think it will fall. Conversely, Investors will buy puts when they think the share price of the underlying security will fall or sell a put if they think it will rise.
These things changed my life.
No longer did I have to have the entire amount of money to invest in a stock’s full price if I thought it would go down. Instead, I could purchase short term put options that would expire after a certain period of time – say 6 months – and should I be right about my expectations, then whoever sold me the put option would be obligated to cover their bet. The put option to me as a buyer ONLY has value when the stock falls, but I can still freely trade the options I own no different than I can the asset it’s attached to if I owned that.
So from 2006 until 2008, I went from $1.4 million net worth to about $2 million – mostly through the use of option trading.
In 2008, I was introduced to Warren Buffet, and was asked to oversee the transition of Prudential Relocation and Real Estate to his portfolio. This gave me a wonderful opportunity to, with my limited contact with him, to study a very successful investor, firsthand.
Oh sure, I took advantage of the relationship a little. When he ‘fell off the grid’ publicly, on rare occasions I would pick up a phone and ask him a question I would make up simply to find out where he was at. I logged many of these calls, which made it pretty easy to link him to his activities and to discover patterns in his travels and investments, so eventually I got to predict his traveling and the subsequent investment he would make.
While this may have made me a few bucks. What I noticed was his foreign exchange market activity, which begged the question:
Why is it every major investment by Warren Buffet was preceded by a major shift in Euros and Dollars?
It was about this time, in 2008, I was taking an Advanced Finance course for my MBA program at Thunderbird, when I had an idea.
In foreign exchange markets, massive trillion dollar markets which typically move very slowly, to make it so investment in foreign exchange is intriguing – most online brokerage companies such as Ameritrade and E*Trade provide something called leverage.
This provides an artificial ‘money magnification’ effect, and there are in built triggers in these companies which limit the losses to only that which you invest. The company did a credit check on me to make sure I would be able to cover should I incur more loss than their triggers could catch should the market shift dramatically….
So let’s say I have $100 and I expect the Euro to rise against the dollar. Because the market moves so slowly, It might be a year to actually see a 1% growth or loss. However, with 400 to 1 leverage my $100 is now $40,000, and a 1% gain in a year on $40k (should my prediction be accurate) – suddenly makes it so I not have – you guessed it – 5x more money than I originally had after only a year!!!
But I had found something.. Interesting….
If I could predict… Warren’s investment based on his travel schedule.
And I could predict the shift in the Foreign Exchange BASED on his past activities…
I could actually take advantage of his predictability and pocket a great deal of money with this leveraged position.
It took me a couple of years to get the courage to make the investment.
A couple years to check it out legally too. I didn’t want to violate any laws or stand the chance of going to jail…
So from 2008 until 2011, my personal worth didn’t’ change from $2.0 million. I was playing it safe. Biding my time. And making small investments here and there just testing my strategies.
So when the perfect opportunity came right around Independence day in July of 2011, I took $2500 of my money in a heavily leveraged position of 400 to 1, effectively giving me a million bucks, and I bought Euros and was heavily leveraged against the dollar the day before I expected Warren Buffet was going to do the same.
His involvement had almost always created a yoyo effect of the foreign exchange.
So my goal was to make money on both sides – of the up and down – of the yoyo.
It was surreal. I left work early that day, and saw I had $7,500in the account at 3pm. I had already made 3x my money in this trade and considered pulling out.
But I stuck with it.
I went to sleep that night, knowing the foreign exchange markets don’t necessarily rest, and woke up the next day and nearly shit myself.
I had $1.1 million in this account, the dollar had shifted that dramatically with downward with Warren Buffet’s move, as predicted.
I pulled out everything I had, immediately, and almost didn’t consider riding the yoyo effect.
But then I bit the bullet.
I then placed $100,000 back into the trade –this time reversing the bet – this time it was against the Euro and for the Dollar.
Heavily leveraged, again. My money, $100,000, effectively being leveraged 400 to 1 giving me the buying power of $40 million dollars.
In hindsight I realize that may have created some pretty significant momentum in itself.
That night, July 1st, I went out with a few friends in charlotte, but I was nervous as all hell, and questioning why I had kept so much money in for the swing. I’d already made a little more than a million, why risk losing $100k?
I suppose, in hindsight, there was something else motivating me.
On July 4th my assets had been seized by the feds, I wasn’t able to access anything, at all.
But I did the math on my gains on the account they seized. The Euro fell a significant amount against the dollar from the 1st of July until the 5th, and while I don’t have precise math, if I could have cashed out on the Tuesday, I would have cashed out easily a billionaire.
In hindsight, it all seems surreal.
I’d actually had $3 million in hard financial assets when they froze my accounts.
They owed me $8 million for my time in service.
And while, admittedly, I had problems with drugs and alcohol and would quite likely have wound up dead within a few years had I gotten ahold of all that money..
I can’t help but look back on it all.
And look at the man I have become now.
And think to myself..
Has the maturation process I have gone through a part of some elaborate plan?
Is all of this….
This… world around me – and environment created for me because something outside of me knew not only that I would appreciate it, but that it was the only way we could get along?
Benjamin Downey asked me yesterday – ‘realistically, what do you want yesterday’ …
I answered with ‘realistically, the $11 million I had taken from me given back’
And then I added in.
“There a lot of underemployed and unemployed actors, writers, and people here in Hollywood I would like to support. There’s homeless people I’d like to help out.”
I didn’t add in “I’d also like to show myself, my friends and family and lovers support in ways I know they understand and we can agree on. Financially.“
Because, in truth, there’s more to this mortal existence I have yet to truly enjoy before I move on to my immortal form.
Which is living an indulgent life without guilt or shame.
Why ask for only $11 million? First, that’s money I had in hand. Second, I know I can turn that into a couple billion, easily, with what I have learned. Third, since the Euro has fluctuated up and down against the dollar since 2010, I can’t ask for something that I could have sold at any time for a loss or a gain when I don’t know when or where I would have sold it and how much I could have tolerated. When I plunked down that $100 grand, I was willing to lose that. The rest of which I wasn’t willing to lose had been pulled out.
I am Q. One and the same man you have seen in Star Trek in a different physical form. This isn’t fantasy or fiction. My mind is just different. And that being is me.
John De Lancie merely ACTED like he was me. Ask him how he studied for my role. He was given material and guided. You’ll learn the truth.
I didn’t leverage my immortal capabilities and mind to make the money I did.
I know you’ve all been questioning that.
And I suspect this is why I have had it all taken from me.
I merely paid attention to someone I respect, Mr Buffett, and I learned your own investment strategies, and simply invested accordingly.
Anyone is capable of becoming good at anything without cheating if you simply suspend judgment and pay attention.
I have faith that you as a society and world will quit punishing me and let me start financially participating in the community I have come to know and love and return to me what’s rightfully mine.
That. Or I continue my shift into immortality and once that’s been obtained, I’ll have at my disposal the ability to know who’s pulled the strings and refused to grant me what I am rightfully owed and have earned. With nearly limitless abilities to manipulate reality at my disposal, I will have fun with whoever is responsible in ways that only I know how.
Oh how I love alternate realities!
Oh come now. How long are you going to maintain the charade these don’t exist to your public when they already accept hallucinations as being real?