The uncomfortable truth about lucky trades

Sure, luck exists.

But, you also have to be in a place prepared to take advantage of said luck.

I once heard a story of a man who was walking through the streets of New York City. He was talking to a buddy of his about his business. Suddenly, across the street, they spotted Warren Buffett. The man dashed over to Buffett and pitched him on why he should invest in his business.

They ended up making a deal.

Now, I ask you: was this guy lucky?

Yes ... 

... and no.

Yes, it was lucky that they bumped into Warren Buffett.

But it was not luck that he had a business built up ready to take on a high-powered investor, had a pitch prepared already, and had the courage to run up to Buffett and make said pitch about said business.

If you’re counting, that’s a whooooolllleeee lotta preparation there meeting an opportunity.

I’m convinced that a guy like that would have eventually found his high-powered investor anyway. It was “lucky” that Buffett happened to be across the street, but, then again, not really.

Most of the time we make our own luck.

That’s the uncomfortable truth of success.

It goes for trading too.

We can get into a trade that works out beautifully. But, really, there’s hours of skill accumulation, application, capital involved, the courage to put on the trade, and the patience to wait while it works out.

That’s barely luck at all.

Mostly, preparation & opportunity.

Go forth and make your own luck today.

Beijing's antitrust probe is the latest power play as the fragile US-China trade truce nears its end.

Bloomberg

Why it matters …

Yes, the government is still shut down, but unless you are flying or a “non-essential” government employee, it doesn’t seem to matter to the markets. (I would argue that if you are the latter, you might find a better/more stable job.)

This article is a signal of some things to come, I think. China is feeling pressure economically with the tariffs and are striking back economically. They have put restrictions on rare-earth minerals, refused to purchase soy beans and now an anti-trust suit against Qualcomm. In the end these are good things for the U.S. as we need to find other markets and sources which are not Communist Atheists with enormous military power. There will be more pain as we separate ourselves from the Chinese economy, but there remains an opportunity to reach out to more friendly places like Argentina to help develop those economies.

Comments: Yesterday was red, today looks to be green. It is Friday so there might be some profit-taking at the end of the day, but we are on a sine-wave seesaw right now.

Check your positions like a normal Friday and be prepared to make adjustments based on your preferences. My guess is that most of your premium has decayed and you are waiting for positions to expire, load the coffers with dry powder for Monday.

A Bravo scan trade idea for around 2.83% return on risk into next Friday’s expiration.