I suppose that title is in a way an homage to James Altucher.
When you get right down to it, I’m too old to be paying an homage to anyone, but then again, I still idolize Ed Kranepool, so you can’t really go by me.
The other day, I was reading some Twitter posts by Paul Kedrosky. He posts on an incredibly wide range of topics, many of them pretty thought provoking. Who knew that you could take out a restraining order on Twitter followers?
His recent posting was one soliciting worst ever airport layovers. Not really heady kind of stuff, but nonetheless sort of fun to relive vicariously other people’s nightmares.
Granted, the winner’s 36 hour unexpected stay in Singapore, or someplace that I’ll likely never visit seemed to pale in comparison to my own experience. Especially, since as noted, the Singapore airport was the only one in the world to have a swimming pool.
I was almost reluctant to post about my own experience Having been held hostage by Tamil Tiger Rebels in the Sri Lankan National Airport, not really wanting to relive the horror, I tried to bypass the topic and learn more about oil futures, instead.
But it just called back to me.
With memories of 18 days worth of Lorna Doones and a limited supply of North Korean 1951 era toilet paper, I realized that I just had to look back and share some of the things that I had learned during that period that have formed my wizened outlook on investing and on life, in general
Here are the 12 things that I learned about life after having been held captive by Tamil Tiger Rebels for nearly 3 weeks.
1. Tamil Rebels don’t have much of a sense of humor;
People take their money very seriously. There’s no joking around when it comes to stock market losses.Did you ever see the looks on the faces of people carrying their belongings out from Enron’s headquarters? Szelhamos always used to say that “Money can bring out the best in people and the worst in people.”. Mess with someone’s money and you will bring out the Tamil Tiger in them.
2. Use your toilet paper sparingly;
Instead of wasting your money or ridiculous investments, especially Penny Stocks, just keep some cash around. You never knowwhen there’s going to be a good opportunity or when you really will need the cash. I always keep cash around just in case I want to buy back some call options in anticipation of selling them again when a stock rebound occurs.
3. Sometimes basic cable is the best you can get;
Why go for derivative plays that are held hostage by their major customer. Just because Apple is using a certain chip in their iBowlingBall, doesn’t mean that they’ll be using that tomorrow. Investment with the companies whose products or services you can understand. Besides, why try to understand 2500 stocks when having a list of 25-50 “Old Reliables” is all you’ll ever really need. They are your “go to” stocks, no need to look for new ones.
4. Even Roy Rogers fried chicken is good sometimes. Oh wait, no it isn’t;
Don’t feel compelled to buy a position in something just because you have loads of cash lining your pockets. Wait for a better opportunity. Go for quality. There may be a KFC right around the corner, although not likely in a besieged Sri Lankan airport. This is just another way of saying go for “Best in Class”. That’s Kentucky Fried Chicken, not Kansas Fried.
5. Don’t plan too far ahead for the future;
There’s absolutely no reason to “Buy and Hold”. In fact, for me, even a 28 day or so holding peiod on an option is too long. VIX low or VIX high doesn’t really seem to matter. Don’t tie yourself down longterm to positions when there is more opportunity in capitalizing on their up and down cycles. If you learn to successfully capitalize on the ups and downs, you won’t get the urge to vomit during the roller-coaster like rides.
6. Even Ideologues can be bribed;
So called talking heads and research analysts have been known to be swayed. When it comes to money, very few will stick to their guns if there are opportunity costs or just plain old opportunities. The grass is always greener elsewhere, if green is being flashed in your face.ï»¿ Take their recommendations with a grain of salt. Bribery isn’t always about money, either. Sometimes it’s about images of fame. People want aiirtime and notoriety. The more memorable a talking head makes himself due to their pronouncements, the more likely you’ll continue see them on air. It’s not necessarily about the quality of their calls, it’s about the quality of their personna that matters. Then the green comes their way.
7. Stockholm Syndrome doesn’t occur if captors are smelly;
No matter how much you like your lousy stock holding, sometimes you need to get rid of a loser. Don’t get emotionally attached to something that would just as soon see you drained of all life and assets. Think YRCW.
8. Ben Bernanke is not a super-hero. He’s just a mere mortal;
Don’t blame the Fed for everything and don’t expect the Fed to be the answer to everything. You’re fat because you eat too much and your hacking cough may be tangentially related to that warning label. But you shouldn’t entertain feelings of guilt just because you’re raking in profits from Altria.
9. The New York Mets will never win another World Series;
Some stocks will never re-capture their glory days. Don’t fall for value traps or old sentimental favorites. You can still follow them, but don’t get caught up in what will only lead to disappointment. Dell may have made great computers at one time, but they will never be anything again other than a value trap. As a corollary, bringing in an aging superstar won’t necessarily bring back the glory days. Willie Mays,Jerry Yang and Michael Dell can attest to that, although Steve Jobs and Howard Schultz may beg to differ.
10. There’s no real reason to watch “Dancing with the Stars”
Technical analysis, although pretty and an art in and of itself, is worthless. How can you have so many well educated chartists, technicians and analysts looking at the same data, yet coming up with wildly different interpretations? You may as well cull your stock picks from Rorshachs. Besides, sometimes a very loose definition is used to determine who is a “star”. When it comes to choosing stocks and investment strategies that fit your temperament, who could possibly be better than you?
11. Sometimes “No” means “Go Ahead”;
Your first instinct isn’t always the best one. It is good, though, to be circumspect, but don’t reject things out of hand before some meaningful thought.
12. Twitter is a productive use of time.
I have to hand it to my oldest son on this one. He sent me to Twitter, told me to ham it up and watch the results. Blog readers, book sales and calluses on my typing fingers. All good.All worthwhile.
In re-reading this, I guess I owe Altucher an applogy. This wasn’t much of an homage.
But still, 12 points to live your investing life by.