Its better to be lucky than smart

Well after we booked 60pct gains in Feb when global markets fell double digits, we were lucky yesterday to be long FAS and even though it jumped out of the gate up 15pct before we could strike we rode the last 20pct up on the triple long financials, getting to be very predictable this market we just need to be patient and let the extreme events occur and its vital to watch CNBC with the volume off. Not many can buy when it opens 15pct up your told to wait for a pull back, well if you want to ride the ultimate wave be prepared to pay the ultimate price.

http://www.youtube.com/watch?v=k2vkwy2vdP4

Great movie point break if you have forgotten it, go get it, for 10years I wanted to be a bank robber after watching that movie and surf, well I robbed banks yesterday by buying FAS even though I have written for months stating their demise. This is what I would have said to you if you missed the opportunity

http://www.youtube.com/watch?v=Fh0KcpYeMVQ

It is better to be lucky than smart but the smarter you are the luckier you are but the more text book you think the more vulnerable you are. Everything in life should be broken down to a simple form and if you can do that you have something, just like Einstein did when creating the atom bomb. Unfortunately the higher educational guys, the PhD's the Masters and all that can't break things down they are taught to build them up to some sophisticated model. So when a lucky hedge fund guy driving home from work saw the foreclosure signs in California 2years ago start to increase in the streets he drives on, he joined the dots very quickly and saw the house of cards about to unravel and made cash on CDS. When the PhD guy drove home he was texting his mates on the IPHONE about the model he built and how it was so complex, you see the foreclosures just wasn't appearing in his numbers yet he needed a few more data points to be statistically significant and so he ignored the noise. Well if a girl at the bar says to me, piss off I don't want to talk to you, I don't need any more of those data points to draw a conclusion, trust me its statistically significant if its a STRONG signal. You only need one of those data points.

So lets continue to be lucky and play this simple game, keep the triple long financials on but every day now going forward I think I am wrong. Every morning when I wake up I feel slightly sad, because I know I am about to try and prove why I am wrong and no one likes to be wrong every day. Its a tough way to live life but its profitable.

If I cant prove that I am wrong than it means I must be right, and therefore made money.

But as soon as I prove I am actually wrong I have a chance to save my money and not only that feel great as I am now right. Think about that for a second its actually the perfect hedge, I have hedged life as I am only disappointed when I cant prove that I am wrong, which means I am therefore right and I have more chance of being lucky.

Giddy Up