PhilStock: Beyond luck or method

Financial Chart and Line GraphA year ago I wrote in a philstock post, “year of the yo-yo” :

“It’s a bizarre kind of comfort to see that stock analysts are much less inclined to tout their skills ever since the crash (of 08-09), admitting that, at least with today’s crazy market, performance is more ‘the result of luck rather than skill‘”.

Although I routinely tell anyone who asks that my successes and failures in the stock market are a matter of luck/unluck, I don’t think stock traders really feel that way.  Surely I don’t.  Yes, the stock market these days feels (to me) like an artificial economy, and yes, it’s the only field I know where recognized “experts” with gobs and gobs of data and ever more technical, technical analysis, regularly and radically disagree.  But in the short term, and long term, and most especially in the quarterly cycling of prices, individual stocks, decently researched, are fairly predictable, except of course for really strange goings on like Chinese solar [i], utterly unforeseen drug disasters, legal problems, manipulations, surprise buyouts or basically anything else you got (unfairly!) tricked on or failed to pick up on in your limited research.

In the year ago post I reported:

“DO (Diamond Offshore), finally back over $60–the deep water driller that was integral to beginning this blog-DAL (Delta) over $9 for a change, STP (SunTech Power)—down around 3.20…If I was to predict risky targets for the year, maybe  $75, $13, and $5-6, respectively.)”

They are now around $73.60, 13.70, and $1.80.

(these have fluctuated since I wrote this post a few days ago)

Reminder: first and last rule on PhilStock posts: Never listen to (i.e., act on) anything I say about the stock market.

My best stocks of 2012? Airlines (JBLU, DAL)—(DAL, I predict has more points to go); [master limited] natural gas pipelines (e.g., KMP—high right now, ~$88,with a dividend ~6% !, since popping after evading avoiding the “fiscal cliff”– I would wait til KMP is back under $80); Apple (AAPL) (buyable under $500) and Diamond Offshore (DO)—the mascot of my error statistics philosophy blog (would not buy til it loops back down below $70). DO got the “mascot” role because the blog began as a forum to discuss papers growing out of the June 2010 conference at the LSE “Statistical Science Meets Philosophy of Science” (see published contributions), and it was during the conference planning in April 2010 that the Macondo well exploded. See, I’d recently bought DO and thanks to the BP spill, it promptly fell from the 80s in March to the 60s in June, 2010—never mind that it had nothing whatever to do with the BP spill.[ii] I spent a couple of months writing my papers using probabilistic examples gleaned from watching the “oil spill cam”, and the (failed) attempts at engaging the blowout preventer, “top kills”, “junk shots,” containment domes, as well as watching the stock go down in price. I used the metaphor of “deep exploration” for my presentation and paper. With the special and regular dividends ~$4 a share, luckily, the loss is recouped even with a moderately restored price–at least in… ~3yrs?[iii]

Apple? A stock that moves between the 400s to just over 700 in 52 weeks is never boring. Anything under $500 is alluring, and it actually grazed $485 a few days ago (at which point I added a little)! It has earnings tomorrow—what do you predict? I think people fear Apple could get “Rimmed” (dropping like Research in Motion (RIMM), after being the leader in smart phones).  I say it goes back to it’s high….unless, of course, it doesn’t. It has a 2% dividend now (a fairly recent change).

Remember, though: Never ever listen to (i.e., act on) anything I say about the stock market.

[i] E.g., Suntech Power (STP) having been propped up by a loan of 500 million euros (of German government bonds) from an entity that didn’t exist dropped precipitously. Long story.  Buying it at 80 cents in the fall helped a lot. Stay away.

[ii] It got hit with (a very unfair) moratorium, and some of its ships had to leave the Gulf of Mexico for Brazil.

[iii] Of course, if one decides to stay in, one has to buy a bit once it’s finished dropping, and on the 2s.d. cyclical drops.

Categories: phil stock, rejected posts | 2 Comments

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2 thoughts on “PhilStock: Beyond luck or method

  1. DAL over $14 at the close, but back down a couple of pennies AH (after hours). It’s been I don’t know how long…

  2. Pingback: PhilStock: DO | Rejected Posts of D. Mayo

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