My dad was a grocer. As such, he did not have very many weekends where he was not working. Instead, he typically was off on Tuesdays and Sundays. One of the things that he loved the most was the Sport of Kings, horse racing. I used to love summer vacation, because that meant horse racing in Northern California was in full swing and every Tuesday, I was going to the track with my dad.
There were two premier horse racing tracks in Northern California, Tanforan Park and Bay Meadows. On Tuesdays, during the summers, my dad and I would make our way to the track. We would pay our admission and then head for the paddock area. That's where they kept the horses. We would spend a lot of time there, watching the horses and matching them up to our program. We wanted to see all of the horses that were going to be running in each race. That way, we could begin our selection process and pick the horses that we were going to bet on that day.
What You Need To Know:
There were people at the track, known affectionately as "touts." Some of the "touts" were very professional. They would produce their analysis of each race the night before and sell a program to you, rating each horse and that horse's strengths and weaknesses. What they did was called "handicapping." They would sell programs telling you which horse to bet on and why. It was a "science." Then there was the less professional tout. For a small fee, he would tell you, in secret, which horse you should bet and why.
But, my dad had his own system. It not the most logical system, nor was it the most brilliant. But, for some reason it seemed to work for us. When we would go to the track it seemed that most of the time we came back home having at least earned our expenses for the day, and many times actually turning a profit. Here's our strategy and I will share it with you for free:
I was born in April, so that's the number 4. I was born on the 7th day in April, so that's the number 7. What we would do is purchase $2 win, $2 place, $2 show tickets for the 4 horse and the 7 horse, for a total of $12 per race. Now, depending on the odds-makers rankings of the horse, any 4 horse or 7 horse that was rated as the overwhelming favorite would not have tickets placed bought for that horse. I mean, why buy a chance on a horse that is paying you back less than you invested for a win? So, in that case, we'd only invest $6 on the other horse.
When we would actually go to the races, one of the things we would do is keep a record of our wins and losses. When we won, we would take our winnings and use those to fund our next trip to the races. At the end of the season, if we had more money than when we started, then we were winners!
And The Point Is?
In many ways, stock market is very much like horse racing. First, there are the tracks. You can bet on horses that run at the NYSE, the NASDAQ, the AMEX, and of course, the foreign exchanges.
You can bet on horses that are broken into classes. There's the Dow 30; the S&P 400, 500, or 600; the Russell 2000 and many more. Sometimes horses "step up in class" and will race against stronger horses and sometimes horses will "drop down in class" and run against horses with similar "breeding."
Then there are the horses, themselves, and boy, do we like to handicap them! We compare AT&T (T), Verizon (VZ), Century Link (CTL), Frontier (FRT), and Windstream (WIN) just to highlight a few of the ponies in the telecommunications category.
And then there are the systems. Everywhere you turn, there are "touts" telling you which horses you need to bet on. They will tell you which stocks are the best ones for you to bet on and why. They will tell you that one is better than another and for every guy touting one stock there is another telling you why it's a lousy investment.
Just go to the "search" function box at Seeking Alpha and type in the symbol for Intel (INTC). Now, you will come to a page that lists a number of articles that are both pro and con, concerning Intel. Each article will have its own method for arriving at their particular conclusion. Fundamentals, Technical Analysis, Charts and Graphs, and some, like a recent article I read, rely on the Chinese practice of I-Ching. It's amazing.
I'm going to let you in on a little secret-again, for free. Every system is a potential winner and every system is a potential loser. Sooner or later, every stock "wins" and every stock "loses." The most important thing to remember is that you want to win more times than you lose. If your system is working for you, don't abandon it for another.
Don't criticize another system. Just work yours. To this day, whenever I get the chance to go to a horse race, I still bet the 4 horse and the 7 horse. It works for me, because my expectations are very low when I go to the track
No comments:
Post a Comment