Sunday, March 25, 2012

Beating the market by trading like a sociopath (part 4)

My recent purchase of Scholastic stock illustrates these principles well.  Scholastic is a well-known children’s book publisher.  Because I have some exposure to the publishing industry through work, I understand how unlikely it is that any book will ever make it to the public domain.  I know that Scholastic has book fairs at schools, children begging their parents to buy them a whole stack of books and parents unable to deny children the simple pleasure of reading.   Parents are nostalgic and force their children to read the same books that they read as children.  Scholastic happens to publish the Harry Potter series in the U.S.—seven separate books all being sold to every young reader for the next century (my several siblings read Harry Potter to their grade school aged children every night together as a family).  Scholastic also publishes the crossover hit “The Hunger Games”, which was being made into a movie just at the time I decided to buy.  I looked on Yahoo Finance and learned that the last activity from an analyst was more than 5 years ago.  The stock was primed to go zeitgeisty with the movie being the trigger to give the stock the requisite buzz and “it” factor for the stupid money.

I bought the stock, two days later the company updated their earnings estimate to account for a huge run up of sales for the Hunger Games books (a trilogy, so three books sold to every interested customer).  In two days I saw the stock go up 14% to a nine-year high, drawing the attention of not just hundreds of investment bloggers but the Wall Street Journal and other financial heavyweights.  In my opinion this lured in some of the so-called “smart money” and we still haven’t even plumbed the depths of the stupid money, which will reach its peak as the movie profits soar and people start worrying that they’re missing out on another “Harry Potter” boom.

This is my best attempt to describe what I believe is a unique vision.  Most of the time I don't even consciously think of these thinks, I just intuit and act upon them.  When I look at the world, the flaws or vulnerabilities in people and the social institutions that they’ve made jump out to me, as if they were highlighted for me and only me to see. I have such an uncannily accurate ability to gauge probabilities and to discover patterns in human behavior that I sometimes appear psychic.When ever you buy or sell a stock, I may very well be on the opposite side of that transaction.  I understand that might be a little little scary.  You should know that I intend to exploit that fear.

25 comments:

  1. "I think a shallow emotion is a faked emotion."

    Is this what a shallow emotion is? I thought a shallow emotion is when you feel it to the max and then the rush is gone and you go back to calm to the POINT where people might say "oh that is sooo fake yo. She was crying today and now she's laughing. If she changes like the wind she must have been faking those tears yesterday."

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    1. I was interested in what a shallow emotion was also.

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    2. shallow emotion feels far away, like a storm that's passing that just barely touches you. you feel it out there, or in there somewhere far away, and you can always focus away from it and refer back to it later. deep emotion is the storm that's right over your head. it's inescapable. it takes all your attention.

      what i don't understand is how anyone can claim to only have deep or only shallow emotions. how would you know? that's like someone saying they see the colour blue less intensely than other people.

      what is a storm to you might be just a little cloud in my horizon. it all depends on perception, doesn't it? and we can shape that by changing what we believe in.

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    3. Emotions that are only self-serving = Shallow emotions.

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    4. Zoe- good analogy. I've wondered the same. How can we compare something like that between people? In my case, my emotions started deeper. I can never know how they compare with others. But I do have the contrast in my experience to draw upon. I don't label myself as any one thing, but I catch myself operating sociopathically. Its like I've outgrown my emotions.

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    5. How outgrown?

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    6. Mmmm. How do I explain this.. Its like growing in any other way. Its slow, and remaining and the day you notice it, you've already been doing it for months. I started noticing little things. And every day the little things became more and more normal. Eventually enough time elapsed for me to see the contrast. I went from having a vague identity with strong emotions (despite having bouts of depression) to feeling mechanical and systematic. I noticed my behavior change before I noticed my emotions weakened. They are still their vaguely, but I have little interest in them unless I need feign something. They are there, but their not in the way now.

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    7. outgrown is a great way to describe it. i am almost completely there now, Grey.

      at the moment my emotions seem smaller than me, like the remnants of some skin that's being shed. i've spent days now focusing, working myself up into this state, gearing up, getting psyched, to meet an unrealistic work deadline. to feel would be counter productive.

      the state seems almost dissociative, where one part of me is completely alert and focused and the other, the part that feels and empathizes, pushed away.

      i would say anyone who has ever had to get psyched for an important exam, performance or competition has experienced this. for the sociopaths here, how is it different for you when you get psyched to perform? or is it different?

      or is the difference only where we habitually live in our heads??

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  2. Fascinating ME. You are tuned into something within the human psyche for sure lol

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  3. I've always felt a similar way, ever since I learned about the crash that kick-started the great depression, that the stock market would be simple to play if you just don't play into the mass hysteria. Basically buy when no one is paying attention to something, and sell when everyone else is buying.

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  4. shallow emotions is like wearing sunglasses everyone is blinded bij the light but you see everything perfect.

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    1. lol. at the same time there is intensity in feeling that makes you feel alive in a way that thinking can't. it's like to be alive one way you have to be dead the other. impossible to be both at once.

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  5. i'm a workplace bully my boss's got ptsd and stockholm syndroome.SO does a narc co worker. Everyone else loves me. (starts smiling the minute they see mee.

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  6. life's an exercise in futility and so are you my dear just another game to play just another toy to break

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  7. traiding is a gamble you can do reaserch and make it less of a gamble but it's till a gamble.
    And sociopaths love to gamble

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  8. Considering that this was done in a bull rally. Its not very impressive.

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  9. No amount of education can instill this ability in people. I think most people have gifts, and the best way to use those gifts are to use it against other people. Life is really a zero sum game for the most part, and it's only in moments of foolishness and stupidity that we behave as if love or win-win situations are true. They are only illusions that make losing easier to swallow.

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