Positive Black Swans and Stocks: 2011

Friday, July 29, 2011

About the current state of the US economy

My analysis is that the US economy on the overall is still fragile and downtrends will come.

From my stand point the US is still a land of opportunities, it has so many factors that make it a land for Positive Black Swans.

I think any given economy needs to identify its fragile points to avoid potential disasters caused by Negative Black Swans, I also believe that it needs to be in the way of potential big growth caused by positive Black Swans.

Results on 28-July-2011

I made the calculations for my full list, it is made of 210 US stocks picked in April 2010. The picks were stored in a text file that has the property "Last modified on 04-15-2010" which proves that the picks of the said stocks were actually picked on the said period.

Here are the stats, everything was calculated starting from 15-Apr-2010:

List composed of 210 stocks.

The most profitable:
Ticker | Highest | Comment
NYSE:KV.A | +635%
NASDAQ:ZAGG | +422% | Trending now !
NASDAQ:JVA | +451% | Trending now !
NASDAQ:CVV | +362% | Trending now !
NASDAQ:MGIC | +284%
NASDAQ:MIPS | +274%
NASDAQ:HSTM | + 227% | Trending now !
NASDAQ:VIFL | +202% | Trending now !

The number of stocks that exceeded +100% in growth is 34. Which covers vastly the losses of the 22 companies that went out of business.

If all stocks were held from 15-Apr-2010 to 28-Jul-2011. See below:

If the stocks that surpassed +100% were sold at their highest levels. See below:

Sunday, June 26, 2011

Unawarness of Positive Black Swans

I ran a Google search for the phrase "Black Swan" to see what bloggers and analysts are saying about Black Swans, each and every one of the results was about the negative ones: market crash, crisis, downtrend... No wonder people hardly know about positive Black Swans.

Nassim Taleb mentioned briefly positive Black Swans trading in his book, here are some quotes

"There are both positive and negative Black Swans.William Goldman was involved in the movies, a positive-Black Swan business. Uncertainty did occasionally pay off there."

and

"Aside from the movies, examples of positive-Black Swan businesses are: some segments of publishing, scientific research, and venture capital. In these businesses, you lose small to make big."

My strategy isn't about "positive Black Swan businesses" but about "Positive Black Swan Practices".

and

"You have little to lose per book and, for completely unexpected reasons, any given book might take off. The downside is small and easily controlled."

similarly to my portfolio you have little to lose per stock but for some reason one them might take off, just like happened last year with INSM.

"In these businesses you are lucky if you don't know anything—particularly if others don't know anything either, but aren't aware of it."

Mr Taleb speaks most of the time about practices that would greatly hurt the economy, he warns the world of the disasters that would happen if we continue to take big risks, but the Negative Black Swans are not the full story of the Black Swan.
Despite the brief paragraphs in the book, I developed deep and advanced understanding of Positive Black Swans.

Mr Taleb speaks most of the time about practices that would greatly hurt the economy, but that is not the full story of the Black Swan.

I picked the above quotes for people who didn't get absolutely anything about my strategy, as important as it is people don't seem to appreciate much of it.

I think it is very important for the Economy to identify it's fragile points and work on them to be less in the way of Negative Black Swans, I believe it is of equal importance for the Economy to identify the opportunities of big growth and be more in the way of Positive Black Swans.

Monday, June 20, 2011

Cheap Stocks picked on June 2011