Sacred Economics 7/3/09

I had a dream which prompted me to begin trading. Kind of hillarious.

I've know traders and they're always in front of a computer screen. Looked boring.

In my dream, there were 2 traders in adjoining cubicles staring at computer screens. One of them turned around and we began talking. I asked what his strategy is. He replied that he has an alternate energy portfolio which he's simply holding. (I know this is a good strategy because a well known astrologer, Mahendra, has an alternate energy portfolio which has grown over 100% a year over the past several years. )

After a while, the other trader turned to talk with me. I asked him what he did. He stated that he has mostly alternate energy stocks because he is confident that these are on an up trend. He stated that he trades frequently, sometimes daily. He tries to sell high and buy low. I asked him how he's doing. "I made a $million today", he said.

THAT'S WHAT I WANT, I thought to myself.

Within days of having this dream, I opened a trading account and acquired a position in FAZ, per one of Mahendra's recommendations.

Back in the early 90's when I first started selling mutual funds, I became a regular reader of the "Wall Street Journal". One of their regular columns was devoted to stock picks of expert portfolio managers. Three or 4 managers were selected and were asked to identify their favorite stocks. The performance of these stocks were tracked to determine which manager had the best picks. There was also a group of stock picks which was called the "dart board portfolio". Stock were picked by throwing darts at the stock pages. I referred to this as a chimpanzee portfolio. Perhaps I am unfairly maligning the intelligence of chimps as compared to "experts".

Consistently, the dart board portfolio performed no better, or worse than the experts' portfolios. Sometimes the dart board portfolio actually outperformed all the "expert" managers.

This, to me, proves that if the trend is correctly identified, just trading with the trend will make money, regardless the strategy.