One of the big stories making the rounds is that ‘trading prodigy’ Mohammad Islam is merely a paper trader and not a multi-millionaire. I concede to falling for the story because the alleged returns as purported by Mohammad, while highly improbable, are not – based on my knowledge of the market and trading – impossible. The bigger problem with the story is not that Mohammad lied, it’s the knee-jerk reaction by the media and the public and what is says about the state of liberalism in America today. It’s weird, but not surprising, that in America, the most successful nation in the world, so many people – none of whom have any personal ties to this kid or in anyway were victimized by him – derived so much pleasure and self-riotousness from the revelation that he wasn’t, in fact, a millionaire, and the loathing on the internet leveled against him seemed more appropriate for rapists and murderers – not a prankster that may have gotten in over his head. The overwhelming skepticism, especially by the liberals, was not surprising because, the left, they have scant knowledge of finance. They just assume the stock market is rigged and or you can only buy shares, not futures or options. Second, the left revels in the failure of successful individuals and institutions, as we’ve explained before.
Using highly leveraged financial instruments such as futures and options, it is possible to turn thousands of dollars into millions in a short period of time. There are thousands of professional traders and fund managers who have achieved consistent, market-crushing returns, although they don’t go around bragging about it. The most famous examples are Warren Buffet and Jesse L. Livermore. Another is Richard Dennis, who in just ten years turned $1,600 into $200 million. Although the methods Dennis employed stopped working in the 80′s and 90′s, he was smart and savvy enough to find and exploit inefficiencies in the market to make an enormous windfall. There are many other stories like this 20-something penny stock trader. Although he cost his firm over $100,000 in a single day due to a botched trade, he turned his personal account of just thousands of dollars into hundreds of thousands of dollars in the span of six or so years. Jim Simons’ quant Renaissance Medallion fund has annual compounded returns of over 35% – turning an initial seed investment of a couple million into over $25 billion in just under three decades. Timothy Sykes, a well-known daytrader, turned his $12,415 Bar Mitzvah gift into $2 million. All of these examples show that, yes, you can get rich quickly trading. Mohammad’s returns were not impossible, as many immediately assumed.
Such great fortunes are amassed not by statistical chance, but by innate skills and talent in much the same way some people, by virtue of genetics, excel at math, athleticism, or any other ability. This demonstration of individual cognitive exceptionalism by Mohammad in order to make his illusory fortune is why the left was so eager to trash this kid because they hate it when someone succeeds without the government’s help, and they also hate elite schools like Stuyvesant that admit based on raw brain power over ethnic diversity and whose students often become very successful as adults. Hence, we see the ‘outrage porn’ is mostly motivated by leftist class envy and the liberal enjoyment of seeing successful people fail. Some non-neo republicans joined in, but this mostly seemed like a leftist feeding frenzy.