Monday, June 7, 2010

In the Pain, Look for the Happy People

When the crowd is happy, people hang with the happy people, when the crowd is depressed, people look for people relatively worse off. Under the premise that you can only make money acting contrarily to the actions of others, it pays to do the opposite.

In the markets, when everything is tanking like crazy, it pays to look at stocks that relatively 'happy' compared to the ones that are being sold off like crazy (stocks that are sad). Then figure out, whether this stock is 'lagging' the falls, or there is fundamental reason why this stock is 'holding up' (correlations) - if the market changes it's mind; that's where u earn your props.

If you need me to explain why, then go eat a sandwich and curse yourself 5 time in the mirror, and don't give up your day job.

Some stocks holding up well against a backdrop of a 3% drop in the market

stocks that are holding up well

QBE - only down 0.74%

ANN - -0.983%
CSL - actually up: 0.94%

WOW - -93%

NCM, LGL - both in the green