Trade Like an O'Neil Disciple: How We Made 18,000% in the Stock Market

4.2. LEARNING FROM OUR MISTAKES

Having both invested in the markets for just about 19 years now, we have logged a sizable blotter of mistakes, some bigger than others. Some mistakes have to do with the macro view of trading while some are more specifically related to trading mechanics. In some cases, mistakes have led to significant new developments in our trading methods. In this section we will examine some of the more significant mistakes from 19 years of investing in the markets and the solutions or lessons that were derived from these experiences.

4.2.1. A Case Study in Overconfidence: Gil Morales

After I made big money in 1995, as I discussed in detail in Chapter 3, I was on top of the world. For the first time in my life I had a significant amount of money to my name, well into six figures, and, to quote Gordon Gekko in the movie Wall Street, "At the time it seemed like all the money in the world."

That money alone would have been enough to get carried away with, but another force was working to help inflate my ego. As a broker at PaineWebber, Inc. (now part of UBS Financial Services) my success in the market was also spilling over into my business, which was taking off as well, and as an emerging "big producer" I was given a big, new office with floor-to-ceiling windows on the 30th floor of the Twin Towers in Century City, a city only in name that is essentially a posh cluster of high-rises wedged between Beverly Hills and Santa Monica, California. In many ways Century ...