I turned $5,000 into $130,000 in Four Months. A Rags to Lower Middle Class Story. By Roy Berger

APRIL 11, 2021 – Okay. Okay. Let me tell this story or at least the germ of it.  About five years ago. At the time, I was what, fifty-eight, fifty-nine, fifty something? I had lost it all.  Again. For what, the fifth, sixth time? Very nice. My last five-year plan led to the obscene criminal behaviour of being laid off at fifty-five. Now, I’m about to shatter a personal record and turn sixty-five.

   If you are laid off in your fifties with no particular trade-papers or slippery white-collar diplomas, you are a criminal. You will feel like one. Society will help in every way. It doesn’t matter what happened, what stupid mistake or bad luck or whatever. Sometimes you do the wrong things, sometimes the wrongs things get done to you. Yeah, yeah, make it this far without a story.

   I was still here, is the point. So now, a different five-year plan would be in order, I needed a plan that wasn’t full of all the wrong ideas, that would be prime, certainly better than the last rabbit hole of nightmare pain. It did often seem that whether I took small steps up or big steps up it was still an elevator shaft down when it was time to crash.

   What was our royal motivation? Sixty-five was coming right on up, just about four years away from me and it’s too late to save. It’s too late to save…wow. Ever hear that before? Think about that, now you’re old and it’s too late to save. Eh? Charmain says I’m good at pulling rabbits out of the hat. So, smart things. What would be smart, what do we think we know? At fifty-nine we know we are about $15 thousand dollars in debt with no job, no financial support. What did we do right? Did we do anything right? Yes, we did one thing right all this time. We kept up payments, we didn’t go bankrupt, we didn’t miss a payment. We have credit.

   In fact, we have a lot of potential credit. Everyone said, apply for credit cards and credit structures while you are employed and don’t need it. I managed to do that one thing.

   I lived on credit after I went bust that last time. I did not alter my lifestyle except for one important factor. Also, to note; I did not live within my means nor do I recommend it. I’ve seen what happens to older men who live within their means during a financial decline. They suffer, they go without. Health may decline, followed by poor cognitive choices. On top of which, if your have your hand out, people can tell you what to do. Anyway, I didn’t live high on the hog, but I lived as if I still had normal income as opposed to zero. Zero, see the law in Canada is you aren’t eligible for welfare or aid if you don’t apply for it. I won’t apply for it. So that is a limitation on the arrogant, for sure.

   So, yeah, the one big factor I mentioned was (A.M.P.), I ate my pride and lived small which meant a room, no more apartments, shared space. Grown-ups don’t like to do that. I put a lot of my furniture and crap on the side of the road, called John and loaded the truck. There were no jobs for me in that town.

    I started sharing living space in another town. Now seriously and honestly, I did spend a five-hour day searching for work online. I eventually got a hit. I sent the prospective employer a copy of my CV with a small all-dressed pizza. That cost me a few bucks but I needed attention. No one else did that. I got hired. That was my minimum wage full time job in another town. They abused me. I made my payments. I ate their sandwich for seven months, stretched that credit card further and found another job in another town. It was a better job. It paid more. It was more abusive, I learned more. I ate their (read S.S.)sandwich for two years.

   Then I got another job in another town and it paid better, and it was nicer, sweeter and I smiled in the warm breath of our nation’s capital. I continued to live small and make my bill payments and since I had a job, started applying for more credit cards, increases in borrowing capacity and started to think as if it mattered.

   What did I know? What life saving information could I grasp from reading several thousand books and not graduating from three different universities? I felt like Ricky in the Trailer Park trying to make my brain do stuff. I always liked a get rich quick scheme. But I couldn’t think of any e-z dough get rich ideas. In the back of my mind, I always remembered the Hunt brothers and the silver spike. I always remembered the 18% interest rates of the 80’s. I always remembered the ordinary dummies I’ve met in life who did well in the stock market. One of my financial heroes is Jesse Livermore, not a dummy. Another hero is dreams. Sometimes I hate dreaming because it’s just another way for God to laugh at me. But the Virgin Mary is on my side, so there’s that.

   At one point in Livermore’s career, he’s lost it all. It happened a few times. He comes back with a tiny little grub stake. He’s got one shot. He spends four months studying every tick in the market and then plunges. Boom! He hits it. He pays back all his debtors. Everyone thinks he is wise again.

   Another amazing rock and roll story is I think in 1966 or 67. The Mama’s and the Papa’s are stuck and broke with their American Express card cut in half and orders to leave the small island country where they are dropping acid and getting in trouble. They have forty-five dollars left. They said, ‘roll it’. They went to the casino and Michelle Phillips made eighteen straight all-in passes in a row on the crap table. They went back to New York with cash. They plunged. They didn’t look to invest their forty-five dollars at an annual return of 12%. Now you talk to anyone, if you can get a return of 12% on your money they will fall to their knees and grasp at the hem of your robe. The best investment funds don’t perform like that. I think 5% makes most people raise their eyebrows.

   I didn’t need 12% either. Come on, I’m fifty-nine and twenty grand in the hole. The average Canadian, whoever that might be, is said to retire at sixty with twenty thousand dollars in the bank. I was in opposite land. But I made my payments.

   Two years later, I was still about $15 grand in the hole. My credit limits were increased across the board. But now I’m researching stocks when I’m awake and not working and sometimes researching while I was at work. This goes on for awhile. Then I’m convinced something is going to go up a nickel or two. I got hot for cobalt. So, I plunged. I played it. It played me. I played it back. In the end I had borrowed eight thousand dollars and got back ten thousand dollars over a couple months. Okay. Alright. I’m smart.

   I did more research. Then, well, Trudeau got elected. Marijuana, cannabis, pot, weed stocks were becoming a real thing. And what a shame it would be if, of all people, I didn’t make some coin out of this, is the short story.

   I researched…a lot, really…a lot. Jesse whispered to me. Then I saw one. This guy was supposed to be the godfather of new wave pot. There were many pot stocks that went crazy high in 2018, it really was like throwing darts. So, I reached deep and borrowed about twenty-thousand dollars on the credit card at 12%. Now that particular stock did start to move up.

   I don’t come from money. My parents had love and I was wanted but there was no car, no house, no insurance, no cash. Dad had Grade Three and fought a war, mom married him. Poor people teach their kids how to be poor. Middle class people teach their kids how to be middle class. Rich people teach their kids how to not to lose it. Rich Dad, Poor Dad should be required reading somewhere along the line.

   All the investment advice says you must remove emotion because it can cloud your judgements. So, I had some discussions with John about this. If I could convince myself that I was investing Galaxy Tokens or plastic poker chips, then I wouldn’t sweat it. That turned out to be quite true. Galaxy Tokens are no sweat. It was an amazing mental transformation. It became a different game. Cash makes people emotional. People lose their minds over fifty bucks, you’ve seen that, right? But Galaxy Tokens…

   The stock continued to climb. I practiced patience, sitting on my hands. It continued to climb. The short story is it went to $110,000.00 in about five months. I sold, cashed out. Spent a lot of time trying to figure out what people did with money. I just laid there, awake. Stunned. I didn’t talk to anyone.

   I waited like a sly fox.  The market declined by half. I bought back in because I’m so above average smart and then the market dropped by another 80% and I was twenty-five thousand in the hole. Pigs get slaughtered. Did you know that? I got to spend a year thinking about whether I was stupid. Like stupid with two o’s. Stoopid. It wasn’t stupid, I’m not stupid, but it was stupid. Dang! I remember thinking, I should have bought the Rolex.

   So, I had to spend another year dealing working on comprehending trading psychology while the market was crap, and I couldn’t find much opportunity. I continued to spin wrenches in the grease at work and make the world safe for bicycles. I continued to research the market about forty to sixty hours a week. Jesse whispered. A hard year passed.

   You know, like I said, I’ve probably lost it all five or six times, but this is Canada. Normally, in this country it takes about three years to get back on top after losing everything, maybe now it takes five years. But for sure, one of the advantages of losing everything once and awhile, especially if you are young, is to lose your fear of risk and loss. We don’t shoot debtors here or put them in prison, well unless you’ve made Revenue Canada mad.

   Yep, I found another one, same godfather, two times a charm. I rode that crazy warrant all the way to ninety-nine thousand bones and cashed out. Clearly, I was very smart. People were destined to laugh at my jokes and invite me to parties. I printed out my balance sheet. I chatted privately with the CEO. I quit my job. I congratulated myself on coming back a second time after being a bone head.

  I don’t know if you can fit yourself here. Do you know how amazed and mystified and blown away I was by myself, by my actions, when the market dropped and I bought back in and then it dropped like a broken elevator oh so much, much more?

   If you’ve never done it. I mean if you’ve never ever lost a hundred thousand dollars twice in two separate moves, it’s hard to explain the feelings. It’s real easy to say buy low, sell high, in particular if you don’t play the game. Some feelings are quite perplexing like I noticed that the feeling I had losing money was better than the feeling I had making money. That took a lot of study in bias/fear/reward articles. I also noticed that while it was happening, I didn’t have a change in heartbeat in either direction, that was good.

   It’s impossible for the average worker to save the kind of cash I was losing every morning on another gap down open. Yes, yes, gap down opens are for buying but not when it gaps down every friggen day for months, then six months, then eight, 2019-2020 was disaster. I discovered capital loss in a big way. Which leads to discovering that it is more worth while to pay $650 to a CPA to do your taxes rather then Fred in Apt 15B for thirty-five dollars.

   This is still Canada, and I don’t know what it is totally, but I have just met so many people who have lived the rags to riches story and I’ve met a lot of ordinary people who made good decisions. I’ve also known some very special people of my generation who seemed to make a game of losing everything and getting it all back.

   Listen, I don’t think you should shoot yourself if you lose a hundred grand. If you play this game, you are normally three to five clicks away from a hundred grand. It’s true that can happen in either direction, that’s the point. That’s part of why people will do anything to get into a country like this. My non-scientific survey tells me that ordinary people do better at this game if they are in a non stress environment, if they are not overly depressed, if they are not in pain, if they are not being heavily distracted, that’s a lot of ifs, eh. Super intelligent people tend to overthink and not pull the trigger. You do have to pull the trigger at some point.

   I had worked out some of the hard parts of the stock market. Picking a winner, being patient, do my own diligence, plunge heavy, go all-in on one stock, no diversity, maximum leverage.  I still hadn’t fine tuned the D.B.I.S., ‘don’t be incredibly stupid’ part of it which has to do with the exit plan. You need a car waiting for you on the other side of the prison wall. If you aren’t sure about that, ask some of the other convicts.

   Perhaps I’m being too hard on myself. Perhaps I am making myself look too silly losing that kind of money. Look at it like this, I know it’s a bias fallacy now but still; let’s say you are right twice in a row, then three times in a row, then five, seven, then ten times in a row. You know, you just have to be right another two times and you will have one million dollars. One million Galaxy Tokens. Imagine. Yeah. You be right ten times in a row and tell me you aren’t tempted to go for eleven.  I remember thinking, I should have bought the Rolex.

   Some of what was sobering me up was listening to the daily news. People were robbing banks for five and ten thousand dollars and sticking up variety stores for two hundred dollars, risking their lives. Maybe I had pretty much lost the concept of what is money. I couldn’t tell the difference between fifty dollars and fifty plastic tokens.

  Holy smokeroonies, I turned 64. I thought of The Beatles and their fun song but there was no one there except covid19 and there was no nothin, 2020 was a robbery in progress.

   I’ve just been talking about the big trades. There were a lot of little ones, maybe 80 to 120 trades a month. Some of the little ones snowballed into bigger ones leading to the being right ten times in a row problem. I traded as if commission didn’t exist. I traded only with the most expensive brokers. Expensive bucket shops answer the phone and only cheat you sometimes. One solid trade pays a year of commish. My monthly interest payments were around $400, just the interest, I only made minimum payments. That little line at the bottom of my credit statement said it would take 225 years to pay off. That’s where I lived. And there really aren’t too many people one can have a conversation with about those sorts of things because people just scream and pass out. “Hey, I just maxed out all my credit cards and a couple years of paycheques to buy penny stocks, I smoke tons of pot and believe in UFO’s. Can we have some serious financial discussions?” It kinda falls apart after that.  

   With all the work and forty to sixty hours a week of due diligence I had managed to successfully exhaust my credit to the tune of being forty thousand dollars in the hole and ground myself down to five grand cash left on the market. Now as you know, in particular if you study military history, this is ideal. There is no better position to be in then to be surrounded, out numbered and out gunned. In everyone direction you look there is clarity. I forget the name of that famous WW1 French General, but he thought those conditions were ideal, “Attack, attack, attack.”

   However, no sweat, it’s all Galaxy Tokens and soon I will have a $536 dollar month pension for the rest of my life. After forty-five years of being in the work force CPP would give me $536. Wow, eh? Isn’t that something?

   More research. Jesse whispered. Ohhh. I applied for ridiculous credit cards that charged 19% to 22%. I would never tell my friends.  Ohhh. I applied for overdraught protection everywhere. Yes, I did think about a pay day loan outfit that charges 300% a year but I didn’t, I thought about it though. What would 2020 vision look like in 2020? Ohhh, it would look like just the sort of thing your math teacher, guidance counselors or mother might suggest; take everything you have, borrow more and buy that particular stock (it was actually a warrant but let’s not get too technical) at four cents. Oh Meta, oh High Tide. I plunged heavy into the stock at four cents. It went down to two cents. My stupid meter needle was off the chart.  After I finished throwing up in a waste-paper basket I did the only proper thing; I borrowed all I could at any rate and bought more at two cents. There was no where to go after that. Except down as it turned out. It went to one and a half cents. I was all in, whee!

   When you are the only one in the room that thinks you’re right, it’s a very surreal position. This whole stock buy out thing was beginning to feel like a Stanley Milgram experiment. I thought I was right and absolutely everyone else, except for Neil my one stock buddy, was totally wrong and completely wrong and hey, I have a grade 12 diploma from 1974 so I know all about big time academic judgements.

   Bummer. The good news was that cannabis dispensaries now delivered. The drivers called me by first name and included cheesies in the bag. That and just like the headlines said, Main Street is not Wall Street. I have no explanation for that. Books will be written. If you were in the 2020-2021 stock market, you know. I’ll feel survivor guilt later if I survive. But considering all the riots, lootings, plague and storming of Capital Hill, that was happening during this period, real later.

   One, two, three months go by. Ohhh, rumor time. The thing starts to move, this time up. Boom, it’s four cents. I guess an alarm clock went off. Then six, eight, twelve…still holding. Do you know what it’s like to hold a stock that triples in a couple months? Then we go, 15, 22, 29…we’re still moving. Holding. Three more weeks go buy…we are now really hitting it. Holding. Wait for it. Wait for it. The thing is now cruising towards fifty cents, fifty-six cents…this is known as euphoria! I will tell you it’s very hard to sit on your hands and do nothing. January pops the account to a hundred grand, February pops the account to a hundred and thirty thousand dollars. Wow, January 2021 alone will cost me ten thousand in capital gains. I was so proud.

   Okay. So, I’ve been here before. I can do this. Hold. Hold. Wait for the whites of their eyes… I start to bail out. I’m dumping my position like mad. That was a fun afternoon. I dumped. It went a nickel higher, I hoped I wasn’t being an idiot, then it came back down. What didn’t I do the last two times this happened?  I had a year of restless sleep pondering on that one, to think about the ‘perhaps I should have done that list’?

   So, I called my buddy, John. I called the bank. I watched some You tube videos on sudden wealth syndrome. I know for a lot of people this was nothing. You could barely buy a newly fitted out Ford truck for that. If you are in the money, that’s nothing. But if you come from not money- it’s holy smokes!  It turns out that my head explodes at a hundred grand. I can’t think beyond that. It’s hard to imagine money bigger than that. I’ve led a blue-collar bohemian life and there haven’t been many times in my life when I’ve had five thousand dollars and many years, I didn’t have five hundred, and a twenty-dollar bill was considered big.

  So, like I said, I cashed out. This time I paid off every single credit card, line of credit, everything, just about forty thousand dollars from 12% to 22%. Then, of course, I think I’m smart. So, I started back in, lost a quick ten thousand. I cashed out again and put on the big brakes. Stand back. What are my priorities now? Well, I want to stay a thousandaire.

   I don’t want to have to say, ‘yes sir, no sir’, anymore unless I feel like it. I am a gambler. No way out of that now. I had too many twenty-five and thirty-thousand-dollar days. In a lifetime, on the kind of shit pay jobs I’ve had, I could never save anywhere close to that kind of money. It’s not my employer’s fault. I didn’t want to work much; I wanted a twenty-five-year party, and I made some bone head mistakes.

   I studied gamblers from the old American west to today. I fully understand why gamblers reach for an opium pipe or narcotic of some kind just to come down. Day trading is certainly the unhealthiest occupation I’ve ever had. I think there are many stories of the decadence of Wall Street traders, I get that now. At the same time there is another unexplainable feeling about chain smoking pot while vindicating yourself with a small fortune. Perhaps it’s akin to the hippie who saved their comic books from the 1960’s and 1970’s.

   What’s my takeaway? In all that time I lived with the tension of being all in almost all the time, sleeping with it over night. With the kind of stocks, I was trading in, low liquidity, penny shares of unheard-of companies it would have been a big deal if one of the principal owners got incapacitated in a car accident. These weren’t huge companies that could absorb casualties. Sometimes too, I got caught in a stock halt which froze my capital.

  The market can stay irrational far longer than anyone can stay solvent. My biggest take away is that it almost doesn’t matter what stock you buy, they all move up, they all have a graph and trough. The risk trader needs to figure out how many shares to buy to get ten thousand pennies on a tick. Is it a 70% chance or better of moving in the desired direction? Those first two questions are far easier to answer than the last, which is, who are you betting against? You are trading against you. You are trading against your psychology. It’s you. Who and where are you? Can you be the brilliant and dispassionate surgeon operating on your own beloved dog? Can you trade while cautioning your emotions? Can you make a list of the top twenty bias? I tell everyone who bothers to ask, if you can’t turn $700 into $900 you really shouldn’t be playing the market with big money.

  Can you quit while you are ahead? Can you lower your exposure? Can you step away from the poker table after winning the last couple of pots? That is some very hard psychology. What? Quit while ahead…ummmm. I keep hearing about bank robbers that get caught after robbing 20 banks.

It’s hard to stop after the rush of successfully robbing 19 banks, it’s really hard. But if you do, if you do pull a profit out of the market you will be part of ten percent. If you pull real money out of the market you will be part of five percent. It’s the easiest money in the world, you don’t have to move boxes, you can wear pyjamas and you are allowed to do good things with your profit.

   It would look good on your resume. “Dear Sir, I would like a job with your company where I can wear a bath robe all day, chain smoke pot and take home $4,000 a week.” Any HR worth their salt would have to follow up with an interview if only to have a funny story to tell at lunch. (Think about that.)

  Me, I like paying capital gains on marijuana profits. The more the better.  For decades that was part of our argument in the ‘free the weed movement’.  I have more interesting plans now, I have more interesting pipe dreams, I have decent credit.  

   I looked into but didn’t get the Rolex because I didn’t want to pay over a thousand dollars every 3-5 years for maintenance. I did get a very expensive Timex though, almost $150 with tax. Oh, and part of what I really, really like, is not having ten thousand cops on my tail, chasing me down for all the dope stock I sold this year. Super downer about the plague though. Sad about this year’s 420 celebrations. It’s not enough to be smart, you have to be lucky too. Everyone stay lucky.

To purchase any of Roy’s books on Amazon click this LINK

He has worked as a waiter, dishwasher, janitor, bike mechanic, student, shipper, receiver, electro-mechanic, used and rare book store owner, typist, bowling ball machine mechanic, short-order cook, secretary, receptionist, salesman, linotype operator, assembly line worker and meat packer.

He has traveled North America by bus, bicycle, car, truck, plane and foot. He has been sleeping in hostels, tents, hotels, apartments, houses, stairwells, out in the open and on someone’s couch.

Roy has published in Monitoring Times, Writers Block Magazine, hundreds of letters to the Editor across Canada since 1970 and published articles and stories in Canadapa, Cannabis Culture Magazine, Rude Magazine, Brick, Media-Five, London Free Press, Faux-Pas, Satellite, Cornwall Free News, The Montreal Review, Powderburnflash and Fogel’s Underground Price & Grading Guide 2015-2016 and not withstanding; one minute in the movie documentary, Citizen Marc. Roy uses a Grundig Satellite 800 shortwave radio to travel the world without a passport and orchestrates important national affairs from his home in Ottawa. 

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