The Karma of Trading

I have been pondering the subject of karma in trading more often ever since I've been confronted with the Colossal Failure scenarios mentioned below (i.e. Finlay, Ambac, Metaldyne, et al).

I have been calling for bandaid ripping as the right thing to do. Many people might not agree because mostly there are certain niceties that investors are expected to follow. It's like the Europeans who frown upon jaywalkers because they themselves like to obey pedestrian traffic signals even when the street's empty 99.999% of the time.

Calling for bandaid ripping is a much toned-down version of Carl Icahn's strategy of corporate raiding. Usually, my bandaid ripping results in nothing more than snickering and smirking from the occasional reader of my blog, but I have been asking myself: if I one day become an influential investor, will I still be able to look myself in the mirror every day?

There's a personal, human interaction side of things. I find a management team that is really doing its best to ride out a storm admirable. They do right by their employees and investors and their CEOs don't take million dollar bonuses 90 days prior to filing Chapter 11. Ah hem, Finlay.

However, management that is just trying to buy time so that they can Madoff a few more victims does not get my round of applause.

It is not just a game for me because bandaid ripping, if done successfully, will have serious implications. It is like going in and foreclosing someone's home - only worse because here you're going in and foreclosing on possibly thousands of people's lives at once. Who has the heart to do that and who wants to be the straw that breaks the camel's back?

Apparently, the banks had no problem with it and hence the situation today. So is what we're seeing today karmic in nature? I'm pretty new age, so I have no issues with exploring the spiritual implications of trading. You can bolt now if you need to. The door's that way.

It might be hard to believe, since I'm semi-Republican and all, but there's a part of me that actually believes that a world where suffering has become a thing of the past could actually happen in the not-so-distant future. Fine, I'm a little bit airy fairy.

I suppose distressed debt investing is the darkest side of my trading. I've always made it a point not to invest in companies that are clearly wrong for society - especially tobacco companies.

I am wondering now if the high road is actually to step away from distressed debt investing once and for all - even when the reward could be astronomical.

But then, I wonder... isn't trading itself predatory in nature? Aren't we all in one way or another running other people's stops and forcing their accounts into liquidation?

Yet, there's a part of me that wants to believe trading is actually a stroll in the park where no one gets bullied and the Easter Bunny is giving away free candy and ice cream. Mmm...

Put down the flip flops please.

I know I've got the whole diva reputation to uphold, but sometimes we need some time to re-evaluate what once appeared black and white.

Trading is so much more colourful than that.