Switch the mindset from living frugally and trying work hard enough to save money to learning how to invest intelligently. For example, before I began trading on the NY Commodities Exchanges, my attitude about money was coming from a place of scarcity. “If only.” was how I started lots of sentences. “If only I could travel more, wear nice clothes, afford to live in a better apartment, etc.” I tried to live as frugally as possible and save whatever I could. It did not work. When I went to the floor, I had no money. I borrowed $2000 to make my first trade. In short order I learned that the only way to make money grow is by investing. Once I thought from a place of abundance rather than from scarcity, everything changed.
I had the pleasure of interviewing Michele “Mish” Schneider. A former special education teacher, Mish was one of the first female floor traders on Wall Street. Today she serves as Director of Trading Research and Education at MarketGauge.com, an industry-leading financial publishing company. For nearly 20 years, MarketGauge.com has provided financial information, technology and education to thousands of individuals, as well as to large financial institutions and publications such as Barron’s, Fidelity, ILX Systems, Thomson Reuters, and Bank of America. Mish was a member of several New York Commodity Exchanges and cut her teeth on the floor learning to trade commodities and gaining a reputation as an expert “chartist’, advising the top traders in the world. At MarketGauge.com, she teaches discretionary trading through an educational and recommendation service called MMMAdvantage, for active investors. With her first book, Plant Your Money Tree, she combines her love of teaching with her world-class expertise in finance and investing. Upon its release, it sold out on Amazon in one day, immediately climbed to #1 new release in Intro to Investing, Retirement Planning, and Business and Finance, and won the BookAuthority.com award for the best new wealth book of 2019.
Thank you for doing this with us! Our readers would like to learn a bit more about you. Can you tell us the “backstory” about what brought you to the finance industry?
Ihave a master’s degree in special education. In late 1979, making very little money as a special education teacher, I saw the chance to change my life. I grew up in a low middle-class household that never talked about Wall Street or investing. When I met a woman, who worked for Merrill Lynch on the floor of the NY Commodities exchanges, she took me to see the floor. It was then and there I discovered what I wanted to do to improve my financial status-work on the floor-so I hustled to get a job and finally did at Conti-Commodities as a floor analyst in Coffee, Sugar and Cocoa Exchange. I knew virtually nothing and learned everything I could-or what is called Baptism by fire!
I did not know I would be drawn to Wall St until I went to see the floor. Then, everything I had not thought about before became a focus-making money, having a finger on the pulse of global events, working closely with thousands of people, mainly men, improving my financial status from broke to independently wealthy, all of this at once became possible. As an athlete, the physicality of the floor appealed to me as well. I liked being on my feet and learning to think fast. In school, I excelled in math, particularly in geometry. When I saw numbers flying across the tape, in order to make sense of the patterns, I began to draw point and figure charts, eventually learning about bar charts, and high probability patterns that formed on those charts. I learned to compare short term price movements within a longer-term trend.
Can you share with our readers the most interesting or amusing story that occurred to you in your career so far? Can you share the lesson or take away you took out of that story?
As a woman on the floor, the disadvantage was my physical size. I could not compete in the “pit” when it got very active. Nor could my voice be heard. I would give my orders to someone if the noise level made it hard for me to yell. Sometimes I would blow a schoolyard whistle to get attention. As far as being a woman in a man’s world-I found most of the guys extremely welcoming, with a few exceptions of course. In the coffee pit, I was constantly thrown out of the ring once I became a member using the excuse that no charts were allowed in the ring. I was brought up on charges and appeared to testify in front of the membership committee. The man who brought me up lost. The committee ruled it was perfectly ok to keep charts in the ring-it was a victory for chartists-but really-for me as a woman as well. One aspect I rarely mention is the social norms of the decade. The 80’s were wild in every way. So, for me, I had to navigate how involved I should be with the after the market scene-enough to be considered fun, but not too much to be labeled a party girl. Socialization was a big part of doing business.
The advantages were that because of my smaller size, I learned to chart-and soon became considered one of the best chartists on the floor. Other traders consulted me all day long on what I saw in the charts. That charting skill is what has endured once open outcry ended and electronic trading began. Another advantage was that I got quite the education on the ways of men-witnessing the “locker room” mentality, gave me an understanding about men’s behavior. With that understanding, I have made many life-long male friends. I also appreciate the differences between men and women without much judgement.
40 years later, this past April, I went to a reunion of COMEX and NYMEX members. As one of two women members who showed up, the respect those men expressed for me was beyond gratifying. I chose the right path with zero regrets.
Are you working on any exciting new projects now? How do you think that will help people?
As a follow-up to my book: Plant Your Money Tree: A Guide to Growing Your Wealth, I am working on a second book. In the first book, I focused on six market phases and briefly touched on the key cyclical and non-cyclical sectors of the U.S. economy through what I call, the Economic Modern Family.
The second book will explore the how the Modern Family relates to the phases. I will demonstrate why the Modern Family is important: the science behind the numbers because they expose the economics in cyclicals and non-cyclicals. Once you are familiar with these six members of the Modern Family, which I depict as human characters all with stories to tell, then it becomes a lot easier to comprehend and track the economy-ergo-what you can expect and prepare for your financial future.
Ok. Thanks for all that. Let’s now jump to the main core of our interview. According to this report in Fortune, nearly two-thirds of Americans can’t pass a basic test of financial literacy. In your opinion or experience what is the cause of these unfortunate numbers?
Most people are terrified about money. If they have one, they typically do not check or know how to analyze their investments in their IRAs, 401, etc. Most bury their heads in the sand, and believe that the market always comes back, even after large declines. And that’s just for investing. In making career decisions, knowing which trends or companies will prosper versus not, is the difference between a productive career and one that has you struggling. The same is true with saving-cash is not always king.
Part of the reason for the terror about money is because of the lack of financial literacy. In school, the basics of finance are barely covered. Kids in middle school may learn about the stock market and as part of the curriculum, find a stock and follow its progression online or in the newspaper. However, even if that gives students confidence in investing later on, picking stocks on the basis of what someone thinks is a good investment without the benefit of strategy typically leads to big losses out of the gate. Once that happens, people believe the market is rigged or decide to trust someone else to make investment decisions for them.
Women in particular, are still attached to the myth that they do not know about money or are too “dumb” to make sound money decisions.
The amount of coverage on financial literacy is sparse and mostly incorrect. In fact, coverage is almost nonexistent. What schools teach is high level theory on economics as opposed to the practical implementation.
In college, unless you are directly in finance, that lack of general education on financial literacy persists.
Passive investing or buy and hold, is the pervasive theory being taught on Wall Street. And it is completely wrong and dangerous. This contributes to the fear.
If you had the power to make a change, what 3 things would you recommend to improve these numbers?
1. Change the mindset from passive to informed, active investing. That means learning risk control and gaining a fundamental basis of knowledge. Plant Your Money Tree: A Guide to Growing Your Wealth, was written to dispel the myths that have been perpetrated by Wall Street and financial planners. The book gives you a compass or a navigation system so that anyone can ascertain what’s going on in the market, economy and with their retirement accounts. From there, they can create an actionable game plan.
2. With the bombardment of news from both social media and 24/7 news loops, folks should learn how to tell the difference between opinion and fact. Not so easy in the current environment. Analysts and economists cannot time the market. People need to become more responsible for their own decisions. It is wise to sit down with those who have control of your money and make sure there is a plan in place in case the market sells off for way longer than what we have seen in the last 10 years. For example, from the crash of 2008, it took the market 5 years to recover. The market fell by 57%. How many folks can afford to sit through a downturn like that again? What about a worse one?
3. If you learn one thing-let it be about controlling risk. Human nature has us programmed to fail rather than succeed. I see this over and over again in how people deal with their money and investments. We tend to sit with our losses way too long and liquidate our winners way too quickly. We are a hopeful species; therefore, we use hope as a strategy. It is not. Learning about how to control risk is not just about controlling losses. It also includes knowing when to take profits.
Ok, thank you! Now to the main question of our interview: You are a “finance insider”. If you had to advise your adult child about 5 non intuitive essentials for smart Investing what would you say? Can you please give a story or an example for each.
1. Switch the mindset from living frugally and trying work hard enough to save money to learning how to invest intelligently. For example, before I began trading on the NY Commodities Exchanges, my attitude about money was coming from a place of scarcity. “If only.” was how I started lots of sentences. “If only I could travel more, wear nice clothes, afford to live in a better apartment, etc.” I tried to live as frugally as possible and save whatever I could. It did not work. When I went to the floor, I had no money. I borrowed $2000 to make my first trade. In short order I learned that the only way to make money grow is by investing. Once I thought from a place of abundance rather than from scarcity, everything changed.
2. Don’t necessary believe what pundits or planers tell you is safe in bad times. The popular thinking of what is safe is all wrong-Wall Street will tell you that bonds are safe. Money market are safe. Utilities are safe. Cash is safe. However, none of these are potentially safe in the current environment. Bonds with the low to negative rates look safe for now. But, when the rate bubble bursts, the artificially low rates could reverse. Inflation, something we have not seen in 40 years will make rates rise. Money Markets-with negative to low rates mean no yield. Utilities are very interest rate sensitive. And cash, especially if the dollar falls or loses its status as the world currency will not be very worthwhile to hold in a bank (without interest rates) or under the mattress.
3. Investing for your future does not mean buy and hold stocks forever. The core of it is responsible risk management. One of the major lessons of the floor was risk management. With most everything cyclical in nature, what’s hot one moment can fail or stagnate for days, months or years. A perfect case in point is the Japanese stock market. It peaked in the late 1980’s. Over 30 years later, the Japanese market has yet to recover ½ of what it lost. From 1968–1982, the U.S. Stock market was flat. After the crash in 2001, it took the market another 13 years to make back that loss. The best way to invest is to stay fluid, follow the trends, and do not be afraid of missing a bottom or a top.
4. Just because something is a value stock, don’t think low prices translate to a good investment. Value investing is another myth which has underperformed the market for well over a decade. Looking at stocks that are cheap simply because you think you cannot lose is a dangerous game. Many believe that if Warren Buffet can make billions value investing, it’s easy. However, unless you have Buffet’s deep pockets, buying value stocks has underperformed the market for last 10 years. Now, that could change of course. However, if you want to trade value stocks or stocks that have been beat up, make sure you do it with a plan-where and when to enter, when to exit if you are wrong, and an idea of where you would like to lock in profits if right.
5. Learn a basic understanding of how the economy works through the cyclical and non-cyclical assets. That is what we see manifest in the stock market. Cyclical assets follow the cycles of the US economy. Non-cyclical assets are items and services that no matter with the economy is doing, folks must have-like basic household products. I created what I call the economic modern family to track the macroeconomics, which impacts the stock market. Stanley Druckenmiller said that we should watch the” inside” of the market in order to more accurately assess the health of the economy. He likes the Russell 2000 (small caps), Transportation and brick and mortar Retail. All 3 are half of the modern family as the cyclical aspects of the economy. In short, if the small capitalization stocks that are all within the US are doing well, then you can assume so is the economy. If the Transportation sector is robust, same conclusion. Similarly, if folks and consumers are buying goods in the stores and not necessarily just online, that is also good for the economy. By tracking even just these 3 instruments in the market, you will have enough information to determine whether the market will stay strong or sell-off.
None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story about that?
I met Keith Schneider, CEO of MarketGauge.com, on the floor of the NY Commodities Exchanges 40 years ago. When we first met, he was running a financial tech company called MarketVision. The software gave the user the ability to track multiple instruments at once or what he called viewports. It set the stage for what became the major trend-electronic trading. He invited me to see the software. At that time, I did not buy it as I was still mainly a floor trader. Then 5 years later, I ran into Keith at the WTC after market hours. He was leaving the floor. We started to date and married 3 years later. At that point, he started Dataview, a new software company that provided investors with advanced technology to analyze and trade the markets.
Furthermore, Keith, a student of the market since his teens, was way more well-versed than I in many different aspects of trading. I was a daytrader when we met. He trained me to become a swing trader. Every trading skill I use today or wrote about in my book and write about in my daily blogs, he taught me. And most importantly, now that we have been together for 33 years, he never stopped encouraging me to learn and grow. I could not have become a teacher, trader and writer without his enduring confidence in my abilities and his willingness to see me continue to work on becoming the best version of myself.
Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?
“You only manifest what you want with work and knowledge.”
I never really thought about consciously manifesting what I wanted into my life until “The Secret” became popular in 2006.
However, although I believe to a degree in the laws of attraction, I never believed what many thoughts was the easy way to get what you want-think it and the opportunity shows up. I do like the idea though, of self-empowerment.
Wanting to achieve a goal means you need to be self-empowered. Yet, just wanting something is not enough. You need to massage that goal with work and knowledge.
A personal example is the book I just wrote. My whole life I have been attracted to writing and teaching. I thought a lot about writing a book as a means to sharing my knowledge and helping people. I tried to “manifest” a book if you will. However, without the work and knowledge plus the commitment, this book would not have written itself. As a result of writing the book, I also have manifested what I envisioned for my career-elevating my status as a business leader. Working constantly on my vision for myself is the empowerment. Achieving those goals takes knowledge and work.
You are a person of great influence. If you could inspire a movement that would bring the most amount of good to the greatest amount of people, what would that be? You never know what your idea can trigger. 🙂
Whether folks want to deal with it or not, the economy rules so many aspects of our lives. Yet, most folks remain passive victims of what happens to their money. The movement I hope to help bring about is one where people begin to look at their financial life with a completely new attitude of confidence. The road to gaining confidence begins with reducing or better yet, losing the feeling of intimidation about money. And how does one lose fear and intimidation? Through preparation and strategy. To begin, I map out six phases or six easy-to-understand stories, meant to give folks a compass or navigation system. This compass will serve as a foundation so that anyone can have the ability to objectively ascertain what they should do about their financial future.
Thank you for the interview. We wish you continued success!
My pleasure-I hope you enjoy it and find worthwhile value to share with your readers!