The Return Of The Day Trader
Sept. 30, 2002
Day trader Scott Smith (CBS)
"I can happily say I've actually pulled in 25 percent return on my capital."
Scott Smith,
day trader
(CBS) Scott Smith leads a fairly lonely existence. Most days the 33-year-old stays home with his computers, his telephones and other tools of his trade. Smith makes money the old fashion way.
He's a day trader, remember them?
They were hot when the market was hot and lots of them went broke. But Smith is buying and selling as fast as his broadband will allow.
He has equipment that tracks how a company is doing minute by minute.
"I've been averaging about a thousand tickets a month," he says.
That's 50 trades a day on average.
And how's he doing?
"I can happily say I've actually pulled in 25 percent return on my capital," Smith says.
It sounds like the late 1990s, when day traders made fortunes betting on a market gone ballistic. Most of them were blown out by bursting bubbles. But today, even after the market has lost thousands of points, tens of thousands of people -- according to government estimates -- are still willing to give day trading a try.
Online trading conventions are drawing crowds and schools have been set up to teach what a lot of people thought was a lost art that's less about buy and hold all about cut and run.
The students attending a class offered by Pristine Capital Holdings, Inc. in White Plains, N.J. held real jobs and put up $25,000 to trade with while they learn.
Are they scared?
"What's more scary? 'Going to work at Enron for all those months, (and) one day you walk out with a box, with nothing,'" says one student. "You tell me what's more scary?"
But there's plenty of reason to be scared. According to the school itself, less than 10 percent of day traders succeed.
Smith knows his line of work has fallen out of favor. These days, people tell him what he can do with his 25-percent profit.
"When I tried to buy a co-op a few months ago, they classified me as a day trader and told me to take a walk,'' says Smith.
Did Smith tell thim about his 25 percent return?
"I told them I was profitable, I told them of my plans," Smith says. "They said take a walk."
So Smith is stuck in his small apartment. And, in a way, stuck in a time warp, in a profession as dated as a dot-com.
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