Rachel Fox’s new lead role is to act like a trader

Back in the 90’s there was an experiment done with a monkey throwing darts randomly at a wall with a bunch of stock names. Which ever one the dart landed on, that stock was bought. The success during this tech-bubble era was impressive as he managed to out perform the market handedly. 

Since March 2009, the market has risen about 120% off of those lows that were formed, due mainly to the Federal Reserve’s Bernanke, Quantitative Easing, Bank Bailouts, Auto Bailouts, two stimulus packages and countless handouts to those who simply aren’t willing to work. To put it in perspective, the Obama Administration alone has created $6,000,000,000,000 (yes that is Trillion) in additional dollars that didn’t exist. 

As a result you have a market that has drawn people in similar to the way the 90’s did, where people quit there job to become day-traders. 

Last week, we had Mila Kunis give her opinion on stocks, and now this week you are seeing a lot of overexposure of a 16-year old actress who is the latest stock picking guru. 

I don’t fault her for trading, but glad to see she is taking an interest in the financial markets. My problem is the countless television shows on the financial networks that are rolling her out like a young Jessie Livermore. 

I started trading when I was 11 – before there was an internet, and I can tell you, by the time I was 16 years old, I still needed someone looking over my shoulder. So the thought that Rachel Fox could actually be someone worth trusting is a stretch in the least. All we  know about here is that she started blogging on August 12, 2012 – That’s is. 

Back on March 5th she talked about how she was going long on EBAY at $54.70, and then once it got down to $54 she decided to double down. That to me is mind boggling. Her justification is as follows, and I quote:

I bought into Ebay at around $54.70, but the stock dropped down to below 54.00. I could have panicked when the trade got bumpy and lost $.70 or more/share but I didn’t bail. I focused and decided to Dollar Cost Average (DCA). Some people say it’s bad to DCA, others say it’s ok. Bottom line, if you make money, it’s always good.

That last comment is what kills me, “If you make money it’s always good”. The fact that she is looking at trading as a money making scheme-kinda-thing, instead of a profession where you take on trades with certain probabilities of success at a defined risk level, tells me that she has no business being placed on a pedestal as some guru of trading. 

I don’t fault her for going on the TV promoting herself, it is a great opportunity for her to do so, and to take advantage of all the popularity. I would’ve innocently done the same thing as she at her age. But the networks are the bigger fools for pulling a stupid stunt like this for the sake of generating ratings and promoting her as someone worth following. She has zero credibility, zero track record, and I highly doubt she has ever seen a sell-off in the broader markets or even a draw down in her own accounts, particularly in the kind of market we are currently trading in.

That is unless she is still doubling and tripling down on that trade in EBAY still – which she has never closed out.