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have spent countless hours figuring out how to determine when to buy and
is called market timing.
savvy investors don’t think much of market timing. People like Warren Buffet, probably one of the richest men on
Planet Earth, believe you should buy a stock, throw it in a drawer and
forget about it for twenty years.
Jan 21, 1999, when Amazon was riding high, I predicted it would fall to
less than twenty-five bucks. You
can read my column in the archives of Vue Weekly.
Here it is at my website.
month ago Amazon was around
$10. A knowledgeable trader – who realized how the stock was sliding
– could have turned ten thousand into a hundred thousand by
aggressively selling short.
Despite my bravado, I had no real confidence in my ability to
pick a loser or a winner and press my bet. Besides, I predicted gold
would go up when the market went down. I was wrong about that.
bought Cisco a year ago. The
stock slipped from around $60 to about $10.
Any knowledgeable trader who realized the stock was in for a long
slide, could have turned ten thousand into a hundred thousand by
aggressively selling short.
thousands of other investors, I had no way of reading the future.
People who read the future are usually lucky or have inside
information. In poker games
great players can read the other gamblers. They rely on tells,
giveaway signs such as those by Uncle Jack who always coughs when he has
an inside straight. Or Aunt
Bee, who frowns when she has two aces.
Tells tell you a lot.
how do you tell when a stock is going to crash? What are the warning signs?
The market indicators? Could
a true tell be higher hemlines?
Beavers building bigger dams?
CEOs hiring more corporate jets? Could an Ouija board help?
Are interest rates a sure predictor of market trends?
of these are dependable barometers of how companies are faring.
I think the
secret is to follow James Kevern.
He is a repo
man who works for Daybreak. He
finds deadbeats who are not paying their monthly auto installments and
grabs their vehicles. In the parlance of his trade, he pops cars
using high tech tools and good old-fashioned skullduggery. All perfectly
legal … after owners miss one-too-many payments.
Vehicle repo is a growth industry.
A car is stolen nationwide every 26 seconds in America.
But one is popped every 8 seconds.
the Wall Street Journal, Mr. Kevern – who hangs out in Silicon
Valley – has been busy hitting employee lots such as at Cisco Systems.
it. The new breed of
corporate executive demands immediate gratification and what could be a
better trophy than a Lexus SUV? Hot shot MBAs leverage themselves blind
buying hot cars.
Here is the tell
to making a fortune. Shakers
of hot industries buy new cars. Everything is great until the economy
suffers a reversal. Then their stock options vaporize and they are left
holding the bag. An empty
money bag and worthless stock options.
A key (car key that is) that something has gone very wrong
is when Mr. Kevern pops employees’ vehicles.
I’ve hit the mother lode of tells to find troubled companies.
By discovering them, I could sell short and make millions.
I will locate troubled companies by making friends with guys like
Mr. Kevern. Repo guys who
can ID the companies that are falling apart by evaluating their
employees parking lot inventory.
you may not want to sell short. You
may want to buy companies on the way up. So how do you identify those?
Simple. Make friends with the guys in the shipping department of
the company you are thinking of investing in. If they are shipping
increased orders, that means business is great and headed North.
When business is great for a company, usually its stock will
I wish I had
thought of that but the tip comes from my second cousin who is a very
sharp fund manager.
There you go
– inside information anyone can figure out without having to know the
CEO. All you have to know are the guys and gals who work in the
this kind of approach that
helps people pick stocks, such as Christopher
and Banks, that go up 9,000 percent in five years.
Like so many
schemes I have hatched, the above philosophy is slightly flawed.
Suppose someone was going to repossess my SUV.
I’d sneak it onto another parking lot that a very successful
company owned. No doubt
guys such as Mr. Kevern are onto this trick and it would not take him
long to “pop” my vehicle. If you saw him grab my SUV, you might
assume the company that owned that parking lot was going bust.
If you sold that company short you’d go broke.
shipping clerks in a “successful” business are robbing it blind by
mailing all its inventory to a ring of crooks.
So if you identified a dramatic increase in shipping activity and
invested in the company, it could go broke, having had all of its
inventory “stolen” by its own employees with the aid of the post
secret is to invest in yourself. A
nice car. A great home. Holidays.
you might die broke.
us to the final question for today – what’s the point of dying rich?
Not much. If you want to read a terrific essay about this, check
out Anna Quindlen's Villanova commencement
To read dozens more of Jaron's hilarious columns, please go here.
copyright 2001 Jaron Summers