Why does this blog exist?
A good question. One that few have asked. Mainly because few have ever stumbled upon this hole in cyberspace. I enjoy writing, and read ceaselessly about the financial markets. I am amused, entertained and energized by them. So I thought I’d throw some of my admittedly useless thoughts about said markets into the ether. Many of the charts I follow are macro-economic plays, though I am always on the lookout for interesting small/micro caps. I try to vary the securities I post about, if only to promote my delusion that someone other than me or my family reads it. Actually, I’m pretty sure no one in my family does.
Why is it called “Playing the Ponzi”? I view the entire monetary and financial system as something of a Ponzi scheme. Starting with currency that is created as debt, and running straight though a global economic model that is based on infinite growth in a finite world. This won’t end well. I’d go a step further and suggest that our materialistic value and belief system is another way in which we’re building castles on sand… but I digress. I view our financial markets as a casino, but frankly, I like gambling. I prefer technical analysis to fundamental analysis because I find the “behavioral” side of investing more interesting than longer term projections based on financial/numerical analysis. Pictures make more sense to me than numbers. I’m dumb like that.
As for an investing “philosophy”, I believe in small/micro-caps. I believe the market rewards growth above all else, and growth is easiest and most explosive when a company is young and small. As a company matures, its growth inevitably slows. Microcap stocks tend to be extremely volatile so I believe strongly in taking profits on the way up (or exiting quickly if the entry point proves poor). I attempt to buy stocks that are pulling back in the midst of a longer term uptrend. I hold anywhere from hours to years, but usually in the 3-6 month range.
I committed every investing cardinal sin between first entering the markets in 1999 and 2002, losing 90% of my seed money. Since then, I’ve found an approach that works reasonably well for me. My average return has been about 25% annually since 2003.