Author, Creator, Founder & Host of Arlington-Prospect Advice Givers

Published: Wed, 06/21/17

The Man in the Purple Jacket! (Weekly Notions...)
(Weekly Notions...)
By: C. Steven Weirich

Out of nowhere, over my right shoulder, I hear a roar… “I want to sell’em ALL!!! 10,000 at TWO… Sold!!! “You idiot”, the man in the purple jacket screams. Not more than 30 seconds later the market has another huge buying wave come into the pit. There are 700 traders, right out of the movie ‘Trading Places’, all in different colored jackets, signaling with their hand gestures wanting and trying to buy anything for sale. Now, frothing at the mouth, his veins popping out of his head, and his eyes bulging he screams again “I want to sell everything. SOLD!!!” Again, another wave of buy orders enters the pit. Now literally jumping up and down with his hands gesturing to sell he screams, “I want to sell everything!! 20,000 where ever you want to buy them.” I remember thinking to myself, “holy sh*t… he is crazy. Why would he go against everyone, not only in the pit, but in the entire investment banking world?” This individuals/contrarians name, Tom Baldwin, the biggest trader in Chicago history. 

Tom Baldwin came to the board of trade in the 1980’s with no money. His goal was to make a living as a bond trader. His extreme discipline and willingness to not go with the crowd made him the legend he is. 

The year is 1998. 

Enter with me into what I call “the octagon of controlled chaos”. This eight-sided straight edged circle is AKA the 30-Year-Treasury Bond Futures Pit at the Chicago Board of Trade. The largest trading pit in the world. 

Entrenched in the long-term capital management crisis, markets are extremely volatile, or what I call, in a complete state of pandemonium. Traders and brokers are making and losing hundreds and thousands of dollars, even millions, each trading session. 

A clerk at the time, in the pit, I had a front row seat watching the world shift their risk into the United States bond market. Currencies in Asia were collapsing. The Russian Ruble and the Japanese Yen were losing massive amounts of value each day. With very little hope of recovery, at that time, the world came to the United States Treasury market for safety. Hedge funds, banks, and investors had only one place to protect their capital.  
It’s easy to follow the crowd. Pack mentality is what I call it.

It’s not easy going at it alone being the contrarian. 

How would you define YOURself? 

I learned a HUGE lesson during those few weeks of carnage. Number one; discipline reigns supreme. Discipline in life. Discipline in business. Discipline in just about everything we do. It’s an essential trait we must possess in order to achieve success. 

Upon entering the bond room, during this crazy time, you were overtaken by the sheer veraciousness of sound. As the bond market continued to rally, go up in price, every day for weeks, it felt like there was no sign of a top. Over seven hundred traders yelling and screaming at the top of their lungs to buy & sell made for a stressful environment. The decimal level is at a point I have never heard before. Imagine being at a Van Halen concert five rows back from the stage, which I experienced on my second date with my wife  That’s a story for a different time!

To survive these “volatile” times, traders exercised extreme discipline. To outsiders, there is this “notion” that the CBOT was a form of legalized gambling. I see it differently. It was an environment where only the truly disciplined individual thrived. The rules were…Don’t let a losing trade get out of hand. Meaning cut your losses at your first opportunity. And make sure to let the winning trades ride…These are the rules I lived by. This discipline is how I attained success as a trader and now as I run my business today. 

Capitulation Day

After what seemingly felt like a never ending rally the day had finally come. The market hit a point to where there was nothing but waves of buy orders coming into the pit. Standing in front of this 100 mph moving train, selling into it, would be borderline suicidal. 

Following that infamous day, the market capitulated and went straight down for two weeks. You know who was selling the bond market the whole way down? You got it, Tom Baldwin. He made in excess of 15 million dollars over the next month. What I, and most others thought at the time in the pit was that he is crazy. Tom Baldwin only new one way and that was to be the contrarian. He had the discipline to get off the boat. And he, the one who gets off the boat first is the one who survives.

In real estate I wish my fellow agents felt the same. Not all, but most agents follow the crowd. Living in their sales culture of a world. They insist on pushing, poking, and prodding potential clients with sales gimmicks. I had an individual tell me, at their kitchen table, last week that an agent they met with told them they would be an idiot if he didn’t list with him. That wasn’t the exact word the agent used but I was told that’s what he might as well have said. If that is not a lack of personal discipline, I don’t know what is.

When I heard this, I just rolled my eyes and said “I apologize on behalf of my industry”. I really do apologize. Agents are trained, by their brokerages and coaches to chase down leads. Instead of building relationships. I guess building relationships in the real estate profession has become the contrarian thing to do. To succeed you must do what most do, chase down the potential client like a blood thirsty coyote looking for dinner. You better hurry, because there are another 100 wild dogs chasing after that same dinner.  

I on the other hand, I am building my business and relationships through the art of storytelling. I am not a writer, but I work each and every day at crafting my message to you. When I started, crafting my stories, I felt like Tom Baldwin did when the world was buying United States Treasury Bonds. Selling was not easy to do. To say the least, I was scared to death to put my thoughts on paper. 

Being the contrarian in the real estate industry, although fun, is not always easy. I get flack for saying and writing some of the things I talk about. But I think it needs to be done. 

When selling your home, you need to differentiate yourself from the competition. Through a disciplined approach by thinking like a contrarian you can add up to $30,000 in profit from the sale of your home. Thinking like Tom Baldwin “The Man in the Purple Jacket” isn’t always easy. But necessary to achieve maximum profit. 

For a copy of the book I co-wrote and collaborated on the contrarian's view point in the Real Estate Industry “The Value Driven Approach to Sell Real Estate” go to the link or shoot me an email. If you are selling your home this disciplined approach will differentiate you from all the others on the market.  ​​​​​​​

Here's to a good week!
C Steven Weirich

Steven Weirich is the Founder & Host of Arlington-Prospect Advice Givers™ www.arlington-prospectadvicegivers.com 

Co-Creator of 'The Value Driven Approach to Sell Real Estate'  
We have seen the traditional real estate approach disappoint
many of our clients. This is why we've taken to studying
the World's greatest investor, Warren Buffett, and his investment philosophy,
to develop a unique approach to selling our clients homes.
We've discovered, by treating your home as an investment,
like a business with a "stock"-price - through a
Value-driven Approach - there is a unique way to extract up to
$30,000 or more of additional profit from any home
on the market.

For a copy of the book go to www.literature4charity.com
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