This page is part of the homeplace advertisement-free web portal. (It is politics-free too, except for a few sections which are obviously not.)
I curate additional material on either Jim Sinclair or Bert Seligman in this open directory. In particular, see Jim_Sinclair's_Best.doc in that directory.
Also, at another location, see Reminiscences of a Stock Operator.html.
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Margin of Risk
Posted
On: Saturday, August 16, 2003
Author: Jim Sinclair
Q: Jim,
you used margin when you where building your foundation. I am young
and willing to accept risk. So Jim, what's your problem?
A:
Let me answer your question under two subheadings for simplicity's
sake.
Responsibility
Few who write on
the Web fully recognize the responsibility they have to their
readers. I would also suggest that this statement applies equally to
those in the print and electronic media as well. In contributing to
the debate on questions of the day - whether they be economic,
political, or both - you need to consider your words with attention
and care, especially when someone else's livelihood is at
stake.
Training
My
father is Bertram J. Seligman. From simple observation and
a study of history, I believe he was the greatest trader that ever
lived. Yes, greater than Jesse Livermore who befriended
Bert because of his talent.
Bert traded like an old master
painted. He used to trade 10% of the NYSE's volume and ended the day
with a 500 share position. He taught me to trade from as far back as
I can remember. I sat beside him in the car, in the office, and in
the house.
We failed miserably as father and son but succeeded
beyond anyone's wildest imagination as partners. He was also a
business man. He financed the first movies in aircraft via "In-flight
Motion Pictures, Inc." He put the first refrigeration device in
trucks via "Thermo King Inc."
A partner of Smith
Barney who ran its trading department had inadvertently become a
controlling shareholder in a small company and called Bert when the
company asked him to lower his position. Bert took on the man's
entire position and control of the company and went on to promote Dr.
Land's new camera. The company eventually became Polaroid and Dr.
Land visited my home on several occasions.
Bert financed a
company that had invented a feminine hygiene product called Pursettes
which was sold in the U.S. through the 1960's and 1980's. One of the
great fortunes he made was in a metals company called Strategic
Materials.
He was also a partner in deals and trading
operations with Jesse Livermore, Old man Kennedy and Arthur Cowen. He
invented what is today called the NASDAQ.
At my request, he
left me totally out of any financial or material inheritance, having
given me more than that: the knowledge to spot value in businesses
and - more importantly - how to trade for a living.
I was in a
trading department when I was 12 years old. At 19, I was an
over-the-counter market maker maintaining 35 markets. That is the
training and qualification you need to handle huge margin
positions.
During the entire gold market [of
the late 80s presumably], I never got a margin call - not
because I never made a mistake but rather because I margined myself
and if a call was pending I liquidated my holdings before the close
of that trading day.
I am trained to be a survivor in a battle
that takes no prisoners. You may not be. I live markets day and
night. I come from the lineage of Jesse Seligman and a famous banking
family.
Now you will love this. The Cartel of Common interest
[The (Gold)
Cartel of Common interest is
apparently a term that Jim Sinclair used in the 200-2003 timeframe.]
is comprised largely of Seligman firms. Yes, my ancestors founded
them all except Merrill. Goldman and Lehman are my family's. Many of
you made fun of me when I first told you those cartel members had met
their match. Well, they have. They face the bloodline of their
founder and did not know it until know.
Read the book, "Our
Crowd," by Stephen Birmingham and it's all there. Markets,
metals and entrepreneurialism course through my entire body not just
my blood. The market is my mistress but compared to the real life
equivalent I thrive on the volatility associated with this one.
I
am committed totally to markets. I love risk and feel alive only when
all is committed. Absolutely nothing else in the material sense
interests me. Now that I have played the material game, even that no
longer interests me. Money does not interest me. I have given away
much more than I have. The game interests me. The game is called
building companies and trading markets.
Now I am passing my
love of this business on to whoever recognizes the gift and is
willing to run with it. My two youngest children have chosen to go
their own routes outside the financial sphere and my eldest daughter
is in my service in Africa. She is an adventurer in her own right but
remains uncomfortable with the intensity I show when the bell rings
which is her feminine prerogative.
For
the curious, my name has been James E. Sinclair since the day I was
born. [That
does not jibe with this: October 19, 2012, at 11:43 am : "I had
a billion in position when I might have had a few million behind it.
Risk was my food. I could not live without it. I was born Jesse
Seligman"]
My mother was Abbey's Irish
Rose.
[Don't know what the reference here is. Abbey's Irish Rose is perhaps
an obscure (not on Barnes & Noble) Romeo&Juliet-type
play or novel. (".. if you have an idea about a love between
children of two families at war with one another, either because of
specific personal things or because of longstanding geo-political
cultural issues, and you write that down, you've got Romeo
and Juliet
or
you've got Abbey's
Irish Rose
or
you've got West
Side Story
and
so on ..." is the best reference I could find. Abie's
Irish Rose
may
be relevant.) ]
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Posted On: Wednesday, February 20, 2008, 5:37:00 PM EST
Downward Economic Spiral Gains Momentum Faster Than Expected
Author: Jim Sinclair
My Dear Extended Family,
.........................................................
I am half Irish and half Jewish so clearly I love to fight and make money.
Respectfully Yours,
Jim
March 12. 2012
Dear CIGAs,
In my interview with Eric King, [audio, text] I was asked what [my father] Bert would do in the middle of the conflicting information concerning the ISDA and the size of the [Greek default] situation. My answer was to go flat. You need to recall he was not an off the floor trader, but a market maker type specialist since the time he sat in the window of a gin mill hand signaling his partner trading on the outdoor Curb Exchange which became the American Stock Exchange. He was a businessman and not a gambler. When there was no clear definition of an event he would not accept risk. That does NOT mean sell gold.
In fact Bert held his core personal physical gold position taken in 1968 all the way until 1980. He never sold an ounce of his core position. If he was long or short something was more a matter of what time of day it was since he would be on the right side of his markets, whatever they did. The man traded like a master painted. I am ok, but I do not have his talent. It was rare and unique. It was more an art than a science. He was a born merchant.
Bert, when he retired, lived in Lugano, Switzerland and was a Swiss citizen. He was a guest of the UBS trading department, and spent his retirement trading still. UBS then was the true conservative Swiss banking institution of the grand old tradition. Bert also spoke the language.
One of the nine times he fired me, I asked him why. His answer was simple. He said; "We are in business to make money, not to lose it." It is hard to argue with that. Yes, we drove home together in silence, and ate dinner the same way. Mother was the peace maker. Add to this Mom was an Irish chef. It is no wonder why I still have acid reflux.
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The life of Jim's father's associate, Jesse Livermore, ended sadly, as the following web document by Martin Armstrong indicates.
Excerpt from http://www.fullfaithandcredit.com/files/analytical shills 01-27-2012.pdf
The key to successful trading & forecasting is to learn how to let the market speak to you and go with the flow. It does so in both TIME as well as PRICE. Turning points are NEVER specific events, but inflection points where highs and lows take place. It would have been nice to have a low first and a more orderly advance afterwards. But markets like to create the worst of all worlds. The Great Depression left no one untouched. The commodity boys were wiped out with the Panic of 1919, the real estate crowd was wiped out in 1925 as farm land kept falling through the Dust Bowl. The stock investors, as they were laughing at the real estate investors, had their day in the sun starting in October 1929 as the Dow fell to about 10 cents on the dollar. The bond investors laughed saying “see how conservatism pays off!” Well they were wiped out in the Sovereign Debt Crisis in 1931. Those who held their cash in gold had it confiscated during the bank holiday of 1933 and the farmers lost their jobs, land, and became the hobos of the day.
So real GOOD major upheavals leave NOBODY standing at the end of the day. The greatest trader of the era, Jesse Livermore, had enough. He just couldn’t cope with the volatility anymore and committed suicide on November 28th, 1940, in the cloakroom of the Sherry Netherland Hotel in Manhattan. The greatest trader of the Great Depression exited the stage by his own hand. He left his wife and children more than $5 million and a note: “My dear Nina: Can’t help it. Things have been bad with me. I am tired of fighting. Can’t carry on any longer. This is the only way out. I am unworthy of your love. I am a failure. I am truly sorry, but this is the only way out for me. Love Laurie” (Jesse Lauriston Livermore 1877-1940)
