Friday, February 04, 2011

The Opposite

George : Why did it all turn out like this for me? I had so much promise. I was personable, I was bright. Oh, maybe not academically speaking, but ... I was perceptive. I always know when someone's uncomfortable at a party. It became very clear to me sitting out there today, that every decision I've ever made, in my entire life, has been wrong. My life is the opposite of everything I want it to be. Every instinct I have, in every of life, be it something to wear, something to eat ... It's all been wrong.

Jerry : Well here's your chance to try the opposite. Instead of tuna salad and being intimidated by women, chicken salad and going right up to them.

George : Yeah, I should do the opposite, I should.

Jerry : If every instinct you have is wrong, then the opposite would have to be right.

Funny, but Seinfeld actually has a lesson for investors. We all have hardwired in us the wrong instinct. We actually need to try and do the opposite. I was reading more of "The Intelligent Investor" and it is so clear in hindsight how we all get suckered in by the high growth sexy story. How we buy Salesforce.Com or AOL with no consideration of price because everyone else is doing it. How we buy stocks when the market is high and sell when things are crashing.

The recent CCME fiasco it the perfect example. People were excited a week ago to buy at $20 and then could not sell it fast enough when it dropped under $14 yesterday. All of this actually emphasizes a key part of MFI that I do not follow very well... "check your emotions at the door. Don't even look regularly at your portfolio and let time work it's magic".

My CCME purchase did work well as it bounced back up 25% today. You just have to use the short seller's attacks in your favor and resist the fear. We'll see if it works longer term.

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