Thursday, August 2, 2012

"You've been thunderstruck!"

A great example of risk control and planning from real life that carries over to investing and trading...

There was quite a powerful thunderstorm on Monday night and my house was hit by lightning. Quite an interesting expereince to smell ozone in the air. My girlfriend was by a window and saw sparks raining down from the gutter. Nobody was hurt but we did suffer two computer casualties. Parts are on order to build new ones but no video updates for a bit I'm afraid.

I want to stress the importance of backing up your data, frequently and externally. We both have external hard drives that we leave unplugged when not actively used and on a shelf. I've seen too many people use it as an active second drive and leave it plugged in. For those that do not know... USB connections carry electricity and many devices are powered through the USB cable. Its a perfect candidate to get zapped along with your computer and defeat the purpose of backing up your data.

How does backing up your data relate to investing and trading? We have to be sure that whatever steps we take to control risk in the markets will actually control risk and not be misused. JP Morgan used their hedging department not for risk control but to make a profit and it blew up in their face. Stop losses for trading do not get moved back to keep you in a trade just a little bit longer. It defeats the purpose of it.

When bad events come up if its a lightning bolt or a crash in the markets and we have a plan and tools in place to protect us then it removes fear and worry. Are you ready for a 50% crash in the stock market? Who knows when it will happen but in the next 30 years I bet we will get at least one.

Disclaimer: The investments and trades in my videos and blog entries are not recommendations for others. I am not a financial planner, financial advisor, accountant, or tax adviser. The financial actions I talk about are for my own portfolio and money and only suited for my own risk tolerance, strategy, and ideas. Copying another person's financial moves can lead to large losses. Each person needs to do their due diligence in researching and planning their own actions in the financial markets.


  1. Great title!, and glad your family is ok. Completely agree that data worth keeping needs to be backed up. I try to email myself important documents while saving them onto external harddrives.

    BTW, lightning bolts lead to more sales opportunities for seagate!

  2. This is a reason why I keep my old laptop. If something happens I have a backup. Though I would need to get a new cable modem.

    1. Exactly and I lost my cable modem too. My laptop is what I am using right now while parts are being shipped for a new computer. McDonald's and Panera offer free wifi in my area to cover my connection. Makes for a good trading backup but terrible video editing platform lol. No videos for awhile.