Freedom First

Prologue

16 August 2007

My phone rang just as Melissa stood up to order us a second round of coffees. I had met Melissa a few weeks earlier at kung fu. With plenty of time on your hands, you find yourself taking up some interesting hobbies.

While kung fu was a bit of fun for me, on one of the few occasions we’d had to speak, Melissa had told me that she had taken it up after beginning a new job in real estate that required her to go out by herself and show houses to strangers.

It was in one of those breaks between sets that she had asked me the question I always find difficult to answer when I first meet someone — ‘So what do you do for a living?’

I’d said something to her about how I used to be a physiotherapist. I’d found in the past that, if I tried to explain to people that I’d retired in my twenties and now I just managed my investments, I would be met with blank stares or disbelief. People are much more comfortable if you can just quickly give them a job title so they can size up where you belong in society.

Rather than stare blankly, Melissa had been curious, which is how I’d come to be having coffee with her in the middle of a weekday.

As she left the table, I checked my phone. It was my broker.

I had put on a trade the day before: selling 50 puts for $1635 each, while buying further puts to insure my position.¹

You’ve probably heard that it is wise not to try to time the market, and that’s true. And it’s also true that if you find yourself in the middle of a gold ...