HOPE or 'Make Your Own Luck'

Waaaaay back in January – the big word CNBC, political media and financial media were using during the Presidential race was ‘infrastructure’.

The new President would spend bazillions on it and investors had to own infrastructure stocks. To use another investment word of the new century…infrastructure was a ‘NO BRAINER’ investment thesis.

It’s a word I have not heard since the election ended.

I really think the country would feel much better about itself if we worked hard together to improve our infrastructure and systems. I am not sure I HOPED for it because I am lucky enough to live in a rather new city (Phoenix) and a rather new neighborhood. I don’t need public transportation to do my job and I am lucky enough for now to afford my family’s medical bills. That said, I would never stand in the way of improved infrastructure.

Today ‘HOPE’ is the buzzword.

It’s a fantastic word but nobody in politics understands what it means (most have never taken risk or made an honest living) and nobody in financial media explains ‘HOPE’ or uses HOPE’ properly in relation to investment survival.

For example, I ‘HOPE’ that Barney Frank comes to his senses and fires himself, but before doing so, he and his perverted cronies do diligent work in finding a replacement that understands finance or is not just an idiot.

This is the Barney Frank that I know:

In 2005, the housing bubble walked right up to his hairy (assumption) ass and kissed it. He giggled and did not recognize it. So, the only ‘HOPE’ I could possibly have is the HOPE I outlined above.

CNBC is now pitching the end of the recession. I know the recession will end at some point so I don’t need to hope for it. I do HOPE that the SEC shuts down most of CNBC because finance and entertainment the way CNBC delivers it is harmful, not helpful.

I do HOPE that whichever banks finally survive start to lend and that the politicians get their head out of their asses long enough to change the way Equifax, Transunion and a few other companies that invented credit scores and whatever other rigged rating systems in place to wreck the current system…are dismantled. In other words…I am a little cycnical about HOPE.

Hope WILL NOT get me a good job or a raise next week or make my sick kid better so I feel like spending.

Hope will not end the recession.

HOPE will not bring an end to the shitty path many businesses and industries are headed down.

In 2002, when my brokerage business IMPLODED from my partner’s thievery and fraud, I had to call the NASD and turn my firm over to them. I had to quickly get a written confession. I had to call nine different attorney and 2 forensic accountants. I had to fight for my life to have ‘Zurich’ honor the fraud insurance policy. I had to visit my best friend and tell him I f*%@ked up managing his investment in my firm and that we may lose it. I had to tell all my limited partners that I was a victim of fraud. I did all that. It was brutal and embarrasing. I got back 95 percent of my investors money but obviously lost the business.

HOPE played a part. I hoped the NASD would figure out where the $3 million stolen and confessed to (more like $7 million) went. I than hoped it would get returned. I hoped the NASD and the FBI would take the case seriously, given the written confession and the fact that money leaves footprints. I hoped that Zurich would be there for me but knew that even if I spent tens of thousands of dollars and hundreds of hours preparing the case for them, I had to just hope I was lucky (I was…they paid). I hoped that Scott Tominaga (look his name up), my partner would get punished a tad more than this:

Scott Hitoshi Tominaga (CRD #2416724, Registered
Principal, Gilbert, Arizona) submitted a Letter of Acceptance,
Waiver, and Consent in which he was barred from association
with any NASD member in any capacity and ordered to pay
$40,173.92, plus interest, in restitution. Restitution must be paid
before Tominaga requests relief from any statutory
disqualification. Without admitting or denying the allegations,
Tominaga consented to the described sanction and to the entry
of findings that he effected transactions in the accounts of
public customers without their prior knowledge, authorization,
or consent. The finding also stated that Tominaga, on behalf of
his member firm, prepared and filed with NASD false and
misleading FOCUS Reports. NASD also found that Tominaga
failed to respond to an NASD request to appear for an on-the-
record interview. (NASD Case #C3A030020)
Joseph Anthony Watters

Finally, I hoped that the arbitration panel would punish Sterne, Agee – our clearing firm – for letting our firms ‘Error Account’ surpass $1 million dollars ($5,000 is pretty high). I could only hope because I had proof up the ‘ying yang’ that Sterne, Agee was not only negligent, but a party to the fraud…They had been HOPING that Scott would somehow pay THEM back if they could all keep it from me, the other partner. Strerne, Agee walked away without a slap on the wrist by the way.

I guess things turned out o.k for me, but if I had relied on hope and not hundreds of quick, difficult decisions, and thousands of dollars and hours trudging through the shit, I would have gotten zilch. Hope does not clean up messes and time does not just make problems go away. You open a file, you close it.

BIG Investment happens when people feel confident in the leadership and can remove the government and political risk as much as possible. I don’t see that happening.

BUT, in the web and mobile start-up world it is ‘Game-On!’

‘Too Small to Fail’ is a rather hot theme and I will continue to work hard, learn what I can and make my own luck.

I hope you have as much luck as me.


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