Category Archives: Career

Shorting a stock

Career

This week you may have seen news reports regarding what is going on with GameStop publicly traded stock. There are two main positions (strategy) when one buys a stock. Long position or short position. A long position means that you simply believe in the company and its future and you want to own some stock in it. Pretty simple and straight forward. I have a friend that only has stock in Coca Cola because he was a pilot for Coke for many years. He likes the company and believes in it.

Shorting a stock is a whole different matter. Basically, it is a bet that a stock will go down instead of up. When people think of a betting, they think of Vegas. In Vegas when you bet money, the risk is you lose the money. When you short a stock, it is not at all like a Vegas bet as many wall street hedge funds are finding out over the past week.

When you short a stock (think it is going down) and it goes up instead, you not only lose the money you invested, but now you have to buy the same stock at the elevated price to cover your short position. Not so simply is it?

Talk about something that ought to be illegal (but it’s not) is when some (not all) large investment funds short a stock, they then begin a “bad mouth” campaign against the company to drive its price down so they can be proven correct and make money on the short position. They ought to be in jail.

In August 2020, GameStop was at $4. At the end of the year it was at $19. Today it at $345.  So, when the stock was at $4, if a buyer bought a short position (bets the stock goes down) to say. $2 and its now $345, they have to invest money to cover the upside. In this example, the price today is 172x what the short buyer said the stock would fall to and if the buyer bought one million shares at $2 (short position) He now must cover (loses) 172 million dollars (his position.) See how this works?

There is a lot happening with this stock and others like it where investors are ganging up together etc. but that is very complicated to explain. The point is, unlike Vegas, shorting a stock is an extremely risky thing to do. At least in Vegas when you lose, you only lose the amount you bet. Not so when shorting a stock. In the past week, many investment groups (mostly hedge funds) have lost billions because of their short positions. So, if you own stock and buy stock, get with a real professional who can help guide you to sound investing in various companies, not gambling on short positions. If you gamble on the short position, you could literally lose (pun intended) your shorts. KT

Eeny, meeny, miny, moe

Career

In the post COVID world, focus could be the most important word of the day. Focus means that you see all the options and choose to focus in one area. This is the difference maker when the world seems upside down and things you need to do or get accomplished come at you like a machine gun.

Each day seems like you are standing at home plate and baseballs are coming at you from all angles. You can’t do it all and certainly can’t do it all well. You need to focus on the things you can have an impact on and forget the rest.

I have these little “things to do” cards I carry in my pocket and have been using them since 1987. The purpose of the card is to list all the things you need/want to do that day, but the magic of the card is you must number them in priority. That’s right, start at number one with the thing that is the most important and go through the list until every item has a number beside it of importance.

Many days I might get the first three done but it is seldom I get all the items done. The objective is to stay on number one until you have accomplished everything you can do for that day on number one. Then you go to number two and so forth and so forth. It is basically a little reminder throughout the day of what is most important and what is not.

If you didn’t number them in importance, human nature would be to start with the easy objectives and work your way up to the hard stuff. By forcing yourself to put a number of importance beside each task, it forces you to focus your attention where you need it.

So, in the post COVID world of eeny, meeny, miny, moe – Do your list and stick to it and you and it will help you keep your focus where it is needed. KT

Never let success go to your head or failure go to your heart

Career, Life

This is always danger in letting success go to your head or worse, letting failure go to your heart.

Success is a great thing and can change and or improve many areas of your life. However, it is important to always “keep a lid” on it. We all know and have met people who want everyone around them to know all the details about everything they are doing and have accomplished and how great they are. There are also many people that want to replay for you, the conversation about some success they had. In general, this turns people off.

There is a level of class and elegance in keeping certain things to yourself. Success is certainly one of those areas you don’t want to talk about it to just anyone. Share it with those closest to you but remain humble. A braggart is probably the least liked type of person.

As important as it is to not let success go to your head it is more important to not let failure go to your heart. The heart is the keeper of all things important. The bible says that “out of the heart, the mouth speaks.” It also says that “out of the heart flows the issues of life.”

Failure can be devastating if you let it find a resting place in your heart. It will dissolve your boldness, take away your resolve and possibly cripple your hope. It could change the course of your life in a way God never intended.

Everyone fails. That’s right, everyone you have every known or read about has had to deal with failure from time to time. It is how you deal with it that defines if it holds you back or strengthens your resolve for the future. Let failure have its perfect place which is to teach and instruct but stop it there. Learn from failure but don’t let it lead you. Learn to forgive yourself. Self-forgiveness could be one of the most important aspects of your life you could ever learn.

Self-esteem is like an egg. It is fragile whether we want to admit it or not. Every time you do something good it is like you add a layer of lacquer to the egg and every time you do something you know you shouldn’t, it is like you remove a layer. If you add enough layers to the egg (your self-esteem) it is not as fragile and can handle changes better. If it is fragile, a little failure could derail your self-esteem.

Learn to forgive in life. Keep your successes to yourself and when you do fail (and you will) be careful to not let that failure lodge in your heart. KT

Overspending to be accepted

Career, Life

Some people will overspend to fit in or be accepted. The issue at the heart is self-esteem. They believe if they do this or do that, buy this or buy that, they will be accepted into the group. What they really want is the self-esteem they believe they will find once they buy it, lease it or own it.

These types of things will either drive you to do something you shouldn’t do, or it will define you. I remember May 1990 like it was yesterday. There was one hotel broker that will remain unnamed that played one of the biggest roles in my life. I love him for it. See, everyone I sold hotels with were into custom suits and stylish shoes with the right shirt, tie all the way down to the socks.

My suits and sport coats were either sale items or second hand. I came into the office one day and the broker I am remembering, laughed at how I was dressed. I remember the look on his face and the amusement in his laugh as he looked over my sport coat. My decision that day was either, do I go out and overspend to fit in, or do I just go out and outsell him? Well, I decided in that moment, that I would never care again what someone else thought about how i dressed, where i lived or what i drove. The only thing I cared about was making money for my family so that my children would have nice clothes and not ever be laughed at.

There are moments that will define you. They don’t have to be big life changing moments. It’s usually the little moments that make us who we really are. That was one of my moments that put in perspective what it was I really wanted and who I really wanted to be.

When you are tempted to overspend or over obligate so they will accept you, think again. There will always be people who want to make other people feel small so that they can feel big. My advice is to just file it away for a later day and manage your own money in a way that you are comfortable with, while not caring what someone else might think. As you get older you will be more proud of those decisions that you ever would be if you try to be like them. There is only one of you and will never be another. Rely on the fact that God made you like you are for a purpose. KT

Past failures don’t determine future failures

Career, Life

Aren’t we glad that past failures don’t mean future failures? That thing you tried to do, and it failed, doesn’t mean that the next thing you try will also fail. It is very difficult to extract yourself from the memories of past failures but if you let them, they will either define your future or be just the educational thing you need to succeed the next time.

Years ago, I was in a very successful person’s office for a meeting and on the way to his office there was a long hallway covered with pictures of companies the person had either started or invested in. When I ask about all the pictures, I was told that it was the wall of shame. I said, “wall of fame or wall of shame?” the person laughed and said it was all the failed investments he had made. There must have been 50 pictures of companies on that wall. He told me that he keeps them there to remind himself that just because you might be good at one thing, doesn’t mean you will be good everything.

He went to tell me that past failures can be very helpful to future opportunities because you have a PhD on what not to do again. I thought that was so insightful because he viewed his past failures as the education he needed for future opportunities.

It’s easy to look at a past failure and allow it to consume you to the point that it hinders you from ever trying again. If you allow that mentality, you could very well miss the future opportunities that God puts in front of you. If you have past failures, remember them but don’t let them control your life. Instead put them in your life’s educational file which will allow you to remember them for what they taught you instead of defining your future. KT