Second post tonight. And my wife thinks the only things I can do more than once a night are eat and fart.
I want to blather about the stock market. I've stopped reading "experts" and "analysts." All I've learned is that they are really good at telling you why the thing they predicted yesterday didn't happen. Just to establish my nonexistent credentials, here's my Marketocracy Fund. It's a virtual fund. Under the chart you can select more recent time frames to see the performance since the market recovered in 2002. I do okay. Not stellar, but okay. I'm beating the S&P over the last five years.
My portolio looks just like that, only smaller. It's like a porn movie.
Anyway, I started playing in the stock market before the internet bubble burst. I read analysts and experts. I read the Motley Fool, Investor's Business Daily, The Wall Street Journal, Barron's, Business Week, Forbes, Fortune, Money, name it. I made myself dizzy trying to figure out a strategy.
Then I read The Warren Buffett Way. After all, he's the greatest investor of all time according to many. Based on what he said, I started completely rethinking all that crap.
A Texan goes to Harvard. He's orienting himself to the campus on the first day and comes across two fellows who look like they might know the way around.
He asks, "Hey. Can one of you fellers tell me where the library is at?"
One of them replies indignantly, "At Hah-vud, we do not end sentences with prepositions."
He apologizes, "I am sorry. Can you tell me where the library is at, ASSHOLE?"
Anyway, so I started just buying good companies with low priced shares. When I bought Apple, absolutely nobody gave them a chance. The stock was trading at about $25 a share. Same when I bought GM last year at $19. I just bought Ford a couple of months ago at $7 and change.
My theory is similar to Warren Buffet, but with a slightly different tilt. He uses the analogy of Mr. Market, a bipolar business partner. Mr. Market is sometimes just giddy. On those days he's willing to pay more for your share of the business than it's worth. Other days Mr. Market is morose and depressed. On those days he's willing to sell you his share of the business for less than it's worth.
You can profit by taking advantage of Mr. Markets moods, or by ignoring his moods. You lose money when you are infected by his moods. I ignore his moods. It's easier.
When a stock's price is depressed, I ask myself if I'm willing to bet that the company will stay in business, and will it make a comeback. The best performing stock I own is Joy Global. It's in the Marketocracy Fund, and I really own some too. I bought it on its way out of Chapter 11. That stock is up over 400% since I bought it in my real portfolio.
So, for what it's worth, my strategy is working. Obviously there's more to the strategy, but hey, I'm just test firing it here for possible future use.
The reason I'm talking about all this is that "analysts" who I generally disdain, are giving all kinds of kudos to Apple and yipping about Apple in similar tones to [pause - Oh Girl by The Delfonics is playing] [Okay. I'm better now] what you'd expect from someone discovering a 2000 year old cork and bread knife near Gesthemane.
No news for a few days. There are rumors. There is speculation. People make shit up out of whole cloth. Jim Cramer honks his face. The stock goes up several dollars one day, down the same amount the next day, then back up again. All this happens with absolutely no information about the company being disseminated.
So all that analysis means exactly dick. I don't think I'll buy or sell any Apple for a while. I might buy some more Duke Power (DUK), though. Do with that what you want.
Humor Break 2:Time for a beer before bed.
A father watched his daughter playing in the garden. He smiled as he reflected on how sweet and innocent his little girl was. Suddenly she just stopped and stared at the ground. He went over to her and noticed she was looking at two spiders mating.
"Daddy, what are those two spiders doing?" she asked.
"They’re mating," her father replied.
"What do you call the spider on top, Daddy?" she asked.
"That’s a Daddy Longlegs," her father answered.
"So, the other one is Mommy Longlegs?" the little girl asked.
"No," her father replied. "Both of them are Daddy Longlegs."
The little girl thought for a moment, then stomped them flat and said, "Well, that might be okay in California, Vermont, and New York, but we’re not having any of that shit in Texas."