I finished my last undergrad class this semester.
Done teaching at Loyola until January when the grad course picks back up.
Walking through campus in that freezing wind, I kept thinking about something Shaquille O'Neal said.
An interviewer asked him about being worth half a billion dollars.
Shaq said he would not tell them exactly how much he had. But he could tell them this. It is not how much money I make that makes me wealthy. It is how much money I keep.
One of the greatest lines ever.
I have friends who brag about making three hundred thousand a year and they are broke. I know traders who post screenshots of winning days but cannot show you their account at year end.
This weekend I want to talk about the lesson that took me 38 years to really understand…
…The lesson that separates people who build wealth from people who just make money.
The Genesis Cog Scanner helps identify when to act. But knowing when not to act might matter even more.
The Privilege of Teaching
There are only 15 or 16 finance professors in the entire department at Loyola. I am one of the select few.
I take it seriously. It is a privilege to be an instructor.
Thursday I learned that 114 staff and professors were laid off from the business school at DePaul. It is not a right to work there. You can be laid off at will any time.
My job is secure because I deliver. When I deliver for them, I deliver as well or better for you.
But here is what I keep telling my students that they struggle to understand. Wall Street is not theory. It is reality. You have to blend them.
I can read a balance sheet and financial statement in 17 to 20 seconds and tell you exactly what a company is doing. Right or wrong, but it makes sense. I have been doing this since I came into my mother's womb.
That is not bragging. That is 38 years of pattern recognition. And the biggest pattern I have recognized has nothing to do with charts.
Why Most Traders Fail
More money is lost not from being on the wrong side of a trade.
It is from how you weight your position sizing.
When people say they are loading the boat with 10% or 20% positions, they have literally opened up the can of worms to blow their account out. Everything I do is 2% to 5% positions.
I contain the damage all the time. No matter what the situation is.
Because when you hit your account hard, and I am not speaking to you because it has happened to me 30 or 40 years ago, it is almost impossible to come back.
When you put in ten thousand and wake up at five thousand, you are done. Not financially done. Mentally done.
That lost capital is also lost mental capital. It makes you want to quit trading.
The only way to stay in the game is to consistently manage risk and contain damage. All the time.
The Two Barriers That Matter
If someone asked me to summarize everything I have learned in one sentence, I would tell you this.
The two most important things are psychological approach and position sizing.
If you can pass both those barriers, you can survive forever in this business. There is no other way to do this.
I preserve and build wealth by getting out early and getting in early. I am always early out and always early in.
That is how every billionaire did it. Not by chasing what is already expensive. Not by loading 20% positions into momentum trades. Not by confusing making money with keeping money.
What December Teaches Every Year
This week I watched traders trying to short a market that will not go down. I watched them buy dips that turned into trap doors.
The algorithms have this market locked in a cardboard box through year end. Window dressing. Performance gaming. Bonuses to protect.
I told everyone in the Genesis COG this week. Do not fight these algos. They are setting up for a lower leg down. It may not be this month. But it is going to be January or February.
Why wait? Why wait a month? Get out now like I am doing.
That is how I preserve and build wealth. I get out when the time is right. Not when the pain forces me out.
The economy has not fallen apart. But it is weakening slowly. The knees are shaking.
When it gives way, you are going to get that slip and slide. We are right on the edge of that slip. So close.
What I Am Doing This Weekend
I am going to enjoy time with family before the holidays really start. I am going to let my grad course prep wait a few more days.
And I am going to sit in positions sized so small that whatever happens Monday cannot hurt me.
The Genesis COG System tracks exactly when conditions change. When the algorithms stop defending support and start attacking resistance. When the programming that protected every dip flips to systematic selling.
But the system does not make you wealthy. Keeping what the system helps you make is what makes you wealthy.
Shaq understood that. I understood that after 38 years. My students are starting to understand that.
This weekend, ask yourself one question.
Are you focused on how much you are making? Or how much you are keeping?
The answer determines whether you are building wealth or just trading.
Have a warm weekend. Monday comes fast.
Professor Jeffrey Bierman
Creator of the Genesis COG System