Roll The Bones

I haven't played the Wall St. ponies in years. I used to when the dot.com mania was exploding. Those were nice times when clicking a mouse made you money but all that was trend following, how could you lose? I once needed a few tires on my car back then. I refused to pay for them. I was going to get someone else to pay for them. The dot.com mania helped me in that regard.

I've said it before, gambling bores me. I've never been to Foxwoods nor do I have any inclination to go, but put me in front of a stock screen and I'm locked on like any other Gamblers Anonymous addict. My first time betting was at the Lincoln dog track and I lost both times. I thought, “Where's the fun in that?” My first successful stock purchase blew me away. I clicked a mouse and money showed up into my account.

For the past nine months, I've been developing algorithms that sniff and hunt for opportunities. I'm about ready to throw the dice if and only if the damned market would fall on it's face. I don't enter a trade against a general trend that's too damn high and the market is at that now. But I keep watch for that fall and entry point. Want a stock tip? I don't have any. I don't purchase individual stocks, I purchase ETF's which are baskets of stocks. Why?

During those past nine months I ran dry runs to see if my ideas panned out. I was zeroed in on Michael Kors, the high end women's apparel company run out of Honk Kong. My stock/financial scans produced very few companies whose 10k's were healthy. Everything about Kors was great, the debt, sales, income statements and all else. I ran a dry run on it. I got raped.

Why did I get raped? The fools at Kors decided to expand their market. They thought that increasing their customer base would produce more sales. It tanked. Sounds weird huh? Kors at one time was the purveyor of silly expensive items that attracted just the very rich. Once Kors opened the doors to the filthy, disgusting middle class, the rich dumped the product as they saw it as no longer being “exclusive” anymore. It's no fun being rich when the everyday schlub can wear the same garments as you can. How can you stand out and rub other people's faces in it if you can't be exclusive?

There once was a law on the Roman Empire's books that stated that only the Emperor could wear purple garments. NO one else could. Purple was the color of royalty. Now imagine how exclusive purple would be if every dirt farmer, goat herder or soldier in the Empire could wear purple? 2000 years later and nothing changes.

This action by Kors to let the every day pigs (you and me) wear “purple”was not readily available through any stock scan I could create. This was information I could not have and hence, could not figure into my strategy.

ETF's are great. They are baskets of 100's of stocks that spread the risk of foolish decisions around. The only ETF's I pay attention to are the broad ones that mimic the S&P 500. I want it generalized to the point of banality. There are those who claim you cannot make a killing on broad based stock picking and they can be right about that. But you can also end up being porked by a rhino while in a pit of squid too you know. Go purchase a biotech stock about whose new drug is being studied by FDA....only to have it denied and watch that stock go to a few tenths of points above zero...real quick.

I haven't pulled the lever yet. Once I go in, I'll go in hard. I'm waiting for the market to throw up. Jesus..would you do it already? I'm waiting! 

Me vs. Every Money Center, Major Bank and Corporation Out There.