Source: Cartoons by Harley Schwadron
I’ve been an individual investor and stock market enthusiast for about 12 years now. Rational Speculation is the weblog that I use to present my individual opinions on the economy, the financial markets, and to discuss my speculative stock market adventures. Welcome!
We’re all aware that market speculation is risky, and some investors even consider it gambling. However, I believe that speculation should not be considered purely a form of gambling, as rational speculators do make informed decisions before choosing to acquire the additional risks. On the other hand, speculation also cannot be considered traditional investment because the acquired risk can be much higher than average. Therefore, speculation falls somewhere between gambling and investing.
But, I’m not altogether just some crazy speculator. I actually invest in the principles of Modern Portfolio Theory, diversification, and appropriate asset allocation using low-cost index funds. While I also buy into the Random Walk Hypothesis and the Efficient Market Theory, I conversely believe that the markets aren’t so quickly transparent.
So, using a small portion of my portfolio, I’ll attempt to profit from that narrow window of opportunity by trading in individual equities.
To accomplish my speculative goals, I don’t limit myself to only one type of analytical discipline. I’ll evaluate a stock based on varied aspects, but will attempt to limit my risks using fundamental analysis. I’ll also attempt to capitalize on market psychology. As a daily market observer, experience and intuition will also factor into my decisions.
I’m not a day-trader and I don’t use options (except covered-calls). My strategy is to swing-trade on a weekly to monthly basis, but I’ll hold my positions longer if I mistime an entry or if I discover an undervalued investment opportunity. You can usually find me watching the news, following market movements with a contrarian point of view, evaluating arbitrage opportunities, seeking out cigar butts or wallflower stocks, and looking for undervalued equities wherever they may present themselves.
I’ll post my my individual stock picks and entire portfolio here for everyone to evaluate. Check in every once in a while if you’re interested in monitoring my progress, or just want to marvel at my mistakes.
