When a crisis presents endless opportunities – how to play the game of buying low & selling high?

 Well judging from my last essay about how to climb on the back of another Bill Gates to make you a millionaire – it seems the falcon has heard the falconer – I have never received so many hits, queries along with the usual charming death threats before in my life, not in the strangelands and ekunaba, at least.
So lets dive right into another mini series of how to make money in bad times – like I said in my last essay, playing the stock market is a glorified form of gambling. I am not going to retract that statement!

Many of you have chided me for my comments – I am sorry, that’s how I see it. The way I perceive it the game is based on one goal and only one: go in low and sell high. Anyone who tells you different is either trying to hypnotize you or sell you something that makes his job more complicated than what it already is – I bet half the time, they’re either playing soduku or solitaire – so that make advice if you happen to be an ordinary Joe, housewife, ISD officer or for that matter someone that doesn’t know too much about the world of investing – investing is no rocket science. In fact. I consider it just one rung higher than alchemy or perhaps two rungs closer to the stuff of Reiki crystals and magnetic insoles.

 To buy low and sell high – you first need to buy into one truism: all that glitters isn’t gold – don’t believe me then go check up on the price of Citi and USB and you draw your own conclusions – these bluest of the blue were once considered the darlings of the Nasdaq; these days they look more like Lola in her twilight days in the Copacabana. As for any attempts to justify them as “long term” investments – my take is that’s as credible as buying into the idea if you bury your ipod in your back garden in maybe one million years hoping that it would evolve into a fully functional organic brain, fat chance! – the long and short of it is “paper loses,” is just a polite way of saying, “I fucked up.”

Having said that investing in stocks is akin to gambling; that doesn’t mean its all predicated on purely chance, randomness, rabbit’s foot or whether you stir your coffee clockwise or the other way; believe it or not; there’s a whole lot of stuff that goes into it – the difference between a professional gambler and the person who impersonates a charitable foundation when they both walk into a casino is – the former knows exactly how to hedge his bets; he may even have a working knowledge of probability along with risk mitigation and at least 30 other skill sets that I rather keep mum about (the last thing I want to do is get red flagged by the card counter spotter brigade in LVS)– armed with these skill sets the professional stands an even chance of taking on the house.

And this brings me to the main nub of my essay this afternoon – how does one go about the business of buying low and selling high? – well, one reliable rule of thumb that I swear by is look out for firms that are haemorrhaging in shark infested waters; in other words look out for trouble firms that the general public thinks is going to fold.

And this comes the tricky part: 9 out of 10 times; troubled firms do fold up. Remember Lehman Bros? I rest my case – so the trick here is to find firms that may have all the appearance of dying but this doesn’t necessarily presage that just because they’re in dire straits – they are going to die.

I don’t want to get complicated here with candlestick charts, probability calculations, head and shoulders, median retractament charts etc. In fact all those gobble d guk just mucks up the whole analysis – what I do is look out for languishing stocks that I believe can make a come back of the century. Usually I do this by working out the old fashion way to determine how and where their business process fits in the general scheme of things – that incidentally is exactly what the Obama and his dream team does as well – before they even decide to bail out a firm; they do a whole lot of cost, trade off and pay out analysis; but bear in mind, the unit of measurement they are concerned with isn’t so much the numbers as it remains the question of what is the social cost? Along with probably such questions like can I afford to turn my back on X,Y and Z number of voters in this or that industry.

And this brings me to my next recommendation of what I consider to be one of the best Lazarus firms that I am planning to play – it’s YRC Worldwide (ticker: YRCW)- but it bears repeating: YOU SHOULD NEVER EVER TRUST ME, TRUST ONLY YOUR OWN RESEARCH. They way I see it YRCW, is in deep shit; they check off beautifully on all my neat clip board yes and no boxes and I would even consider them as the quintessential cannot-be-allowed-to-fail firm – one reason why I believe this to be the case is YRCW isn’t just your normal nut and bolt firm; it’s a mega trucking firm – and why is this so important?

Simple – their business model just happens to be one of the most important linchpin in the whole scheme of things – that’s to say; if YRCW happens to be a watch; it would probably be the flywheel (that’s the part that cannot fail) not some nut that you could do without – what most investors fail to realize when they say this firm is going to die is they have absolutely zero idea how big a role trucking plays in the general well being of an economy – neither do they have the imagination to realize sudden changes in the infrastructures of huge economies and the industries all revolve around the whole idea of the supply chain – and when it comes to the US, trucking is still king, not planes, trains or even ships come close. The U.S. economy’s strong dependence on the movement of merchandise to and from large metropolitan population centers separated by such great distances is all held together by truck drivers and that simply means; if they go; you could just as well draw a straight line and conclude that its bound to have far-reaching and devastating effects on the economic recovery.

This is what I call the domino effect. For example in the 1929 stock-market crash,, the chain reaction of reduction in sales due to consumers’ prioritizing and reducing purchases of luxury items, with firms cutting back on production thus increasing unemployment, exacerbated the vicious cycle of that broke the link between sales and employment, result: it plunged the US economy into the Great Depression.

So don’t be a dummy; the 1929 crash did not cause the Great depression anymore than you can claim a tornado whipping through the junk yard of Natsteel can fully assemble a 747 – what it did was create the perfect conditions that short circuited the entire (supply chain) – that’s to say in layman’s lingo, it mucked up the movement of merchandise – now you understand why I strongly believe (and this discounting the play of the truckies unions, but please bear in mind always , this is a subjective take) YRCW cannot die and will never be allowed to die as its sudden demise would result in a large hollowing of the cargo-transportation workforce, thus throwing a tungsten carbide spanner into Obama’s recovery plan.

What most people don’t realize; is even microscopic changes can be amplified and when it comes to supply and demand chess board (I gleaned this first hand in gaming, make small changes and you will be surprised how you may even end up with something as big as a mushroom cloud) – what you need to understand is simply this: transportation is the Queen in this game of chess; so even a miniscule change in lets say something as benign as mucking around with the speed limit on interstate highways can have far reaching effects by exacerbating the supply chain and this was what happened following the recession of the early 80′s. nationwide speed-limit reduction

That one more reason to take a closer look at YRCW – I am not planning to jump in right now – my gut feel still tells me it has to bleed more before those dummies in the Fed can really connect the dots to realize that if banks happen to the equivalent of the heart in the economy; then something as forgettable as trucking has to be the miles of arteries and capillaries that make up that same organic construct – called the US recovery plan.

Once those dummies make the connection; my cross hairs are dead set on set on YRCW, it’s going to be a head shot and that in a nutshell is how you plan the game of buy low and sell high. Besides, I have great respect for truckies; they work hard and they sacrifice alot and the best part of it is they are very real and decent folk.

Happy Hunting and need I say again – caveat emptor!DISCLOSURE: THE AUTHOR CURRENTLY DOES NOT HAVE ANY POSITIONS IN YRCW, BUT WHEN DESTINY AND OPPORTUNITY INTERCEPTS – IT’S ONE SHOT, ONE KILL!

“We deal with real people who value the idea of community; we never deal with fakes – that’s like building on sand, this is very biblical - what good is all this e-money, if all it does is enrich a handful of fakes? You tell me where is the wisdom there? For one we don’t even want to have anything to do with these pretentious people; so can anyone here please tell me what can does bunch of legends in their own minds possibly bring to our table?…….exactly! You invest in the real, you get real returns and real benefits; you put it on a fake and you might as well just allow your life to give itself away like camphor – that means who we decide to ally with is jugular in more ways than I can possibly elaborate – that has to be wisdom.”

Vollariane 2002 – Recorded by the Chronicler – The Book of Ages – The Brotherhood.

N.B DO BOOKMARK THIS SITE, IF SOME OF YOU CLAIM, YOU ARE MISSING OUT, BOOKMARK IT, THAT WAY WHEN WE DECIDE TO TAKE OFF SOMEWHERE ELSE, AT LEAST YOU CAN FOLLOW US ON THE YELLOW BRICK ROAD TO CONT READING SOME OF OUR STUFF . BOOKMARK, IT AS WHEN THEY TAKE OFF, AS THEY DO, AT LEAST, YOU WILL HAVE A LINK, DO IT NOW!– ANOTHER GOOD REASON TO BOOKMARK THIS SITE IS THIS HAS HAPPENED  RECENTLY – http://singaporedaily.net/2010/01/11/daily-sg-11-jan-2010/#comment-7611 , THE BP HAS BARRED ALL FUTURE ESSAYS TO BE POSTED BY THE SINGAPORE DAILY. I DID ASK BABY DARKNESS ABOUT THIS AND THIS IS WHAT HE HAD TO SAY, ” There are two ways to read, one is you let someone spoon feed you like a baby. The second is you choose what and how you want to eat.  Remember, if your body is a temple. Your mind has to be the altar piece; it’s the linchpin that makes possible the grand idea of La Convivencia with you and your community, spirit, mind and perhaps 7 million other things- without this one thing, the power to choose, you are simply a cactus on a window sill! 

So understand this little rich girl, there is reading and there is reading, there is a world of difference, if you dont even bother to argue with the belief, you are what you eat. Then you would have absolutely no problem understanding – why, you are most definitely without a shadow of doubt what you read and dont read.

You can certainly categorize what I write, but you have no right to judge ……that was what Singaporedaily did - a broad line has to be drawn, otherwise, dont be surprise, if someone decides its card blanche to give you and me the mushroom treatment, “feed you shit and keep you in the dark.” So this has nothing to do with Anime 3 and her rubberband brigade. I value her readership and support, but this is a bigger sphere we are dealing with here – so this is where I will draw the line…it will hurt…like that other fake site, Temasek review that kept faking doss attacks; but how could they let the real wolf out without first planting the idea in peoples mind, “if it can happen to me, it will also happen to you,” Think about it – they cried wolf – we helped, but this time, I am not going to stick my neck out for no one…its everyman for himself….I dont even care, if the whole house catches fire…call it tough love, but if you aren’t a hard man, then you shouldn’t be in the ring and that’s the only way to deal with people who cry wolf, its all here, the explanation

http://singaporedaily.net/2010/01/12/daily-sg-12-jan-2010/#comment-7618 - dont worry dotty, the readers will eventually pick up the scent…they always do, you just wait and see, dont ever sweat the small stuff, life is too short – Darkness 2010……”Missy Dotty

Darkness 2010 – The brotherhood Press 2010