What a difference a year makes. This time last year, I was pretty much a clueless player. I had started playing almost four months earlier, and had amassed a portfolio of just over $7m, which I thought was a fortune. I never read Ticker Talk, never touched bonds or funds. A year on, I’m STILL clueless, but my port has powered passed $350m – probably despite my best efforts, rather than because of them.
Self-depreciation aside, I have learnt a few things along the way. You’d have to be pretty damn slow not to. Some of this may be obvious, some of it may sound dumb, but I learnt it all the hard way and I sure as hell wish somebody had told me about it when I was starting out. I thought I heard a rumor: If movie execs or agents played this game, they could so easily clean up. Actually, I think the people who would do best are those working in studio press departments. This market thrives on rumors. Any rumors. It doesn’t really matter if it’s true of false, merely that it’s credible. If the rumor’s false, so what? Just be ready to reverse your position, as the stock price will rocket back in the opposite direction soon enough. If it’s true, the stock has a fighting chance of staying where it is. Ever way, you’re going to have to move fast to make a profit. The market’s cyclical:
If movie execs or agents played this game, they could so easily clean up. Actually, I think the people who would do best are those working in studio press departments. This market thrives on rumors. Any rumors. It doesn’t really matter if it’s true of false, merely that it’s credible. If the rumor’s false, so what? Just be ready to reverse your position, as the stock price will rocket back in the opposite direction soon enough. If it’s true, the stock has a fighting chance of staying where it is. Ever way, you’re going to have to move fast to make a profit. As sure as bears relieve themselves in the woods, this market is going to cras- *ahem* adjust. There were major crashes last in year in January and also in May. The market has been on a upward trend since mid-September. Sooner or later (my guess: sooner), it will crash. That isn’t anything to worry about in and of itself. If we’re all affected equally, the relative effect is zero. If and when the correction happens, don’t panic. Just get ready for inevitable – and probably very swift – rebound. Don’t get caught up in the hype: Case in point, take a typical teen sex comedy, low budget, no stars, released in the middle of summer against mountains of competition, with the moniker American Pie. Doesn’t sound like it has much going for it, does it? Except fabulous word-of-mouth. How much could it possibly adjust to? Way back in May, I came to the conclusion, that the most – most – it could adjust to was $60. By early July, the share price was approaching $80. Did I short it? Did I, hell. Why not? Because I bought into the hype. For a while, I really did think that it could do blockbuster-style opening numbers. It opened, and adjusted to $56. Great numbers, but also realistic. There are countless other examples of exactly the same effect (EYESW, FIGHT, 3KING, etc). The trick is, whatever else happens, never lose your sense of reality. LIFE is BLAIR:
Case in point, take a typical teen sex comedy, low budget, no stars, released in the middle of summer against mountains of competition, with the moniker American Pie. Doesn’t sound like it has much going for it, does it? Except fabulous word-of-mouth. How much could it possibly adjust to? Way back in May, I came to the conclusion, that the most – most – it could adjust to was $60. By early July, the share price was approaching $80. Did I short it? Did I, hell. Why not? Because I bought into the hype. For a while, I really did think that it could do blockbuster-style opening numbers. It opened, and adjusted to $56. Great numbers, but also realistic. There are countless other examples of exactly the same effect (EYESW, FIGHT, 3KING, etc). The trick is, whatever else happens, never lose your sense of reality. How many people play stocks after adjust? I’ll be honest, I didn’t used to. Usually, it’s a big port game. But check the box office charts. There are always a couple of bargains on offer. There may even be some arbitrage stocks. The safest money you ever made. The numbers never lie…: History matters. Historical trends are real. Analogies are, to some extent, valid. Pay attention to them. For instance, January, February, March (with the exception of Easter) are the slow months. That, my friends, is a historical fact. It’s being borne out. …except when they do:
History matters. Historical trends are real. Analogies are, to some extent, valid. Pay attention to them. For instance, January, February, March (with the exception of Easter) are the slow months. That, my friends, is a historical fact. It’s being borne out. All box office records are there to be broken and, boy, did we have a number of them break last year. BLAIR completely blind-sided me. I still can’t believe it did the numbers it did. Except, for every record that broke, there are countless others which didn’t. Takes STRWR, which had a crackerjack opening. Absolutely massive numbers. But it still adjusted down by about $80. Why? Because the market had hugely over-estimated what was possible. If, to make any money, you need every record under the sun to break, better start rethinking how safe your investment is. Know who to listen to: Not all columnists are created equal. We’re all “experts”. It’s just that some are more expert than others. I pretty much read them all, but I listen to some more than others. Read a columnist’s latest work, but also read their backlog. Is there any solid reasoning in their writing, or is it merely hype? Are they consistent? Do they make predictions? If so, how accurate have they been? Sure, past performance is no guarantee of future performance – but it’s the best indicator we have. Who do I listen to? My colleagues at HSBR, naturally. Outside this site? I’m not going to tell you. I don’t want to warp you with my prejudices. My advice? Read them all and decide for yourself. Nobody knows anything:
Not all columnists are created equal. We’re all “experts”. It’s just that some are more expert than others. I pretty much read them all, but I listen to some more than others. Read a columnist’s latest work, but also read their backlog. Is there any solid reasoning in their writing, or is it merely hype? Are they consistent? Do they make predictions? If so, how accurate have they been? Sure, past performance is no guarantee of future performance – but it’s the best indicator we have. Who do I listen to? My colleagues at HSBR, naturally. Outside this site? I’m not going to tell you. I don’t want to warp you with my prejudices. My advice? Read them all and decide for yourself. Ain’t that the truth. William Goldman’s words about the film industry itself ring equally true of HSX. However much we, the so-called “experts”, claim to know, we can’t predict the future. Anything we say is merely advice. That’s all. In the end, the choice must be yours. You’re going to have to decide when to follow us and when to do your own thing. It’s just a game: Try to remember that the next time you see tempers raised or a running feud. Try to remember that the next time you lose a mil on a poor opener. Just try to remember it throughout. If you promise you will, so will I.
Try to remember that the next time you see tempers raised or a running feud. Try to remember that the next time you lose a mil on a poor opener. Just try to remember it throughout. If you promise you will, so will I.Here’s to the next millennium.
-Huy
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