The Remarkable Tales of Boca Biff
NEW YORK ( Real Money ) --
"What we have learned from history is that we have not learned from history."
-- Benjamin Disraeli
In January 2004, Boca Biff made his debut in my diary.
No character has elicited such a response from so many subscribers and contributors.
Over the past 15 years, Boca Biff has embodied the mentality of the daytrading community. As such, Boca Biff has become a better market barometer than the put/call ratio, Investors Intelligence , mutual fund/hedge fund exposures or any other sentiment indicator. And the Boca Biff Indicator, a measure of the very embodiment of speculation, as it does through Mr. Market's speculative bouts, is again signaling red.
But let's begin by framing Boca Biff's speculative trading history.
1998-2000: The Daytrading Orgy
It all started with that once-in-a-generation orgy of speculation in the late 1990s as a new class of investors emerged on the market's stage -- namely, daytraders.
The 1998-2000 timeframe held a historic precedent that took daytrading to a new art form. The bubble began to burst in the first half of 2000 -- almost, it seemed, as quickly as it surfaced. In time, the Nasdaq fell by about 75% from its highs.
Eight years ago, I introduced readers to the true story about my favorite daytrader, Biff Marksman. (His name has been changed to Boca Biff in order to protect his anonymity and in order to protect our innocent Real Money subscribers from him.)
Biff is an old acquaintance who operates out of Boca Raton, Florida, a locale that former SEC Commissioner Breeden once described as a town where there are more sharks inland than in the waters surrounding it. The city's name comes from boca de ratones , a Spanish term meaning "rat's mouth," that appeared on early maps and referred to hidden, sharp-pointed rocks that gnawed or fretted ships' cables. It is a town where the Ferraris, mansions and over-the-top conspicuous consumption are known to sometimes run wild.
Boca Raton has always been the capital of the daytrading community and ground zero for brokerage boiler rooms that inhabit the resort area.
It is also Biff's, the ultimate daytrader's, home.
Biff Makes $15 million in 1998-1999 Then Loses $20 Million in 2000
As I mentioned previously, I first wrote about Biff in 2004.
I hadn't heard from him Biff since 2000, as I thought that he was cured from the leveraged daytrading influence that took the U.S. and the markets by storm in the mid- to late1990s, contributing to a mushrooming in margin debt, the ultimate speculative rise in our markets and the eventual -- or should I say inevitable? -- piercing of that bubble. Of the daytraders, there were few that played as intensely as my friend Biff.