Testing the easy rules.
I warn you that this is pretty unscientific, and is unlikely to be the basis of any new volumes about surfing the stock market.
But I'm reminded of Alan Kohler's comment (made incidentally in May) that the stock market is easy - "sell in May and walk away" - "buy again in September" - and you will win 90% of the time. The man seems to be a master of expressing things simply.
I got to thinking that there might be a few other simple rules. Maybe even the Aardvaak Factor had an influence?
Ever noticed how many people give preference to the top end of the alphabet. Probably research alphabetically and get tired after a while.
Take the tipping competition for this month - there are 18 entries starting with A, B or C, and 36 starting with D through Z. 33% in the first 3 letters.
But the winner so far - defying the odds - is from the D through Z group, LVL !!
Theory 1 - Based on Yellow Pages.
Call your business Alpha rather than Zeta, and it could make all the difference. This should give an edge to the A-K entries.
Theory 2 - Based on Lotto.
Everyone picks their lucky number 7 or 11 etc, but when they win so do 100 other people. The BIG winners are the ones who use rare lucky numbers like 40-7= 33 and 40-11= 29 etc. When they win they are alone ! and evryone says - what strange numbers to pick!
So I checked the following two portfolios made up of A-K and L-Z resp.
And checked what changes had occurred since 30Jun06.
Bank + Iron ore + Zinc + Uranium + Retailer :-
Representing A-K :-
ANZ (376 at $26.59 = $10000) now down -1.5%
BHP (345 at $29.00 = $10000) now down -5.1%
KZL (2410 at $4.15 = $10000) now up +19.5%
ERA (779 at $12.84 = $10000) now down -4.2%
CML (880 at $11.36 = $10000) now up +15.1%
Orig Value $50,000), now up +4.8%
And representing L-Z
NAB (484 at $35.16 = $10000) now up +1.3%
RIO (129 at $77.80 = $10000) now down -6.0%
ZFX (998 at $10.02 = $10000) now up +9.7%
PDN (2430 at $4.11 = $10000) now up +10.9%
WOW (496 at $20.15 = $10000) now down -0.3%
Orig Value $50,000), now up +3.1%
Based on this I am as confused as I ever was.
I would have to conclude that Theory 1 was almost exactly the same as Theory 2.