Here's a very positive article from the Wall Street Journal.
"dal" can be found @ activetrader.net
Paper Carrier Finds a Better Life
Buy Taking a New Route Online
By REBECCA BUCKMAN and SUSAN PULLIAM
Staff Reporters of THE WALL STREET JOURNAL
Only in the Internet age could a 40-year-old man who has made his living delivering newspapers find financial success trading stocks online.
No, this doesn't involve a trader buying his own island, as the commercials for discount brokers suggest is possible. The trader, Donald Lachot, doesn't even own a fancy car. But he has netted enough in trading profits that he has been able to move from a rundown house in a crime-ridden area outside of Atlanta, to a quiet cul-de-sac in a middle-income neighborhood. There, he says, he is living a "dream" that he says was made possible only because he became a full-time Internet trader.
"My dream in life was to make money being my own boss, and that dream has come true," says Mr. Lachot. "I'm very, very happy."
Plenty of Losses
To be sure, for every Mr. Lachot, there are many more whose experiences as full-time traders have been less fortunate. In a study this summer, state securities regulators found that in one day-trading office, 70% of the traders were losing money. The losses have likely been even worse amid the market turmoil of the past few months.
Still, there is another side of the story as well. And Mr. Lachot's tale helps explain why so many individual investors have been drawn to the business of trading full time, as well as why so many of them have persisted through the recent volatile times.
In an interview this summer, when the stock market was in a steep decline, Mr. Lachot said he had made $60,000 in trading profits on the $100,000 in his trading accounts. When asked why he didn't quit while he was ahead, he predicted, "I won't lose it." Several weeks ago, his prediction was holding up. His trading profits for the year stood at $94,000 with six weeks to go before year's end. "I'll be up $100,000 for the year," he says.
How did Mr. Lachot keep his profits intact this summer when it looked like the long-running bull market was on its last leg, when so many seasoned pros were struggling? "I was stagnant for a few months," he says. "I didn't trade much during the bad summer months." Indeed, unlike the stereotypical day trader who dashes feverishly in and out of stocks, taking big risks along the way, Mr. Lachot plays small. "I'm really still building capital," he says. "My account is still fairly small, so I must be conservative and take only small risks."
Now -- and Then
His day typically begins around 6 a.m., when he checks his news services and any after-hours trading in stocks he was interested in the day before. On most days he makes 50-60 trades, typically buying or selling 1,000 shares at a time as he sits in the dining room, which has been converted into his office. He is surrounded by eight computer monitors that provide him with stock quotes and other market information.
It's a different life than the one he knew for years delivering papers, until he took up trading full time in 1995. "I had wandered from one dead-end job to another, but eventually paper routes became my main profession," he says. "I had many routes, both morning and afternoon," at times making as much as $30,000 a year. "I got up at 2:20 a.m., 365 days a year," Mr. Lachot says. "I never had a day off for many years."
He settled into a routine and married in 1985. But his life was far from perfect. "We lived in a terrible house in a crime-ridden neighborhood," he says. "Gangs hung out on our corner. Our house had no insulation, no dishwasher, no shower." In 1990, his wife left him. "She thought I was a loser," he says. "At the time, she was right."
In 1995, Mr. Lachot began experimenting in the stock market. He remarried and decided to buy stock in his new wife's company. "I lost tons of money on that stock," he says. "I lost it as fast as we earned it," he says. "I would save up, like, $5,000, then lose it. Save another $5,000, then lose it. Over and over." In total, he says, he lost about $30,000 in 2 years.
But sometime in 1997, Mr. Lachot began to get the hang of trading. "I started to notice trends and patterns," he says. "I began to see the same stocks running up and down and started to get a little feel for what would happen next." Mr. Lachot says he developed an online relationship with an experienced trader whom he began to swap information with. "He's helped me a lot," he says.
Mr. Lachot has two accounts, one for day trading through MBTrading, out of El Segundo, Calif., and one for longer-term positions through E*Trade. Aside from the fees he pays to his brokers, he doesn't pay for many expensive services. He uses Microsoft's stock site (moneycentral.msn.com) and uses two Web sites: briefing.com, which charges a monthly fee, and dayinvestor.com, which is free. He also logs in daily to activeinvestor.com and uses the Yahoo messenger for private chats with his trader mentor.
He now lives in a three-bedroom house with his wife and two children. He has a two-car garage, new furniture and a 1997 Plymouth Grand Voyager. "Last week, I made $13,000," he says. "That was an exceptional week for me,"
Indeed, not one that would be possible for a paper boy. But his experience as a paper boy taught him some lessons that have come in handy, he says. "Wintertime was horrible," Mr. Lachot recalls. "My hands would literally freeze to the machine as I would unlock it to convert it over for the Sunday paper. Then came Hurricane Fran. The river had overtaken a road I was on. I kept driving. The water came up over the hood. I knew if I let off the gas the engine would die."
But, he says, he learned "endurance, toughness and perseverance." The last one, he says, has been the most important for him as a trader.
--To contact Rebecca Buckman and Susan Pulliam, write: The Internet Trader, The Wall Street Journal Sunday, 200 Liberty Street, New York, New York 10281. Email: online.investing@wsj.com |
