Most Active Month

While cogitating the behaviour of investors (see Halloween and Investor-think) I notice that October is often (usually?) the most active month: More shares trade in October than in any other. Here are the DOW stocks (over the last 10 years) (summing the monthly volumes). Click on the picture for an enlargement. P.S. The 10th month is October. Now why is that? Does everybuddy dump their stocks, concerned that October is the month that's had all them crashes? But September is (usually) the worstest month: Click! If'n I can't figure the thought processes that influence my wife's buy-sell decisions,** how will I ever figure out how investors think, eh? **You'd think I could figure that out ... we'll soon be celebrating our 50th wedding anniversary!

 

Investor Think

So I've been thinking about how investors might think. It may (or may not) be rational thought. Nevertheless, it's fun to play with various ideas: Click!

 

Guess the price

I've been reading this book. Fascinating! It's all about what events/numbers/environments influence our (often irrational) decisions. Once upon a time I generated an interesting spreadsheet (described here) which asks you to predict future stock prices (based upon historical stock behaviour). Not possible, right? The past is no indication of the future, right? So what does influence our prediction? Aah, if'n I could only identify investor irrationalizations I'd be a mbillionaire! However, I haven't finished the book, yet. But when I do ...

 

another Index

Remember when I invented the world's best Index ... which I called the g-Index? My idea was: "Invest equal amounts in each stock". Well, I asked by brother-in-law (Gerry) how he'd invest in the DOW 30 stocks. His response was to invest lesser amounts in them that got large market caps. No WAY !! So I played with investing an amount proportional to the inverse of the Mkt Caps and got this (over the past year): See the red curve? That's HIS Index. Tonight, he's coming over for dinner. I'll tell him he's ALSO got a G-Index.

Debt

I've been reading about the U.S. debt (as a percentage of GDP) and thinking that they is in grave danger. Over 60% of their GDP. Mamma mia! So I check out how they compare to other countries: Click on the chart for a larger image. 60%? Peanuts, eh? Check out India & Japan and (gulp!) even Canada! 'course, there are various ways of measuring "National Debt" as there are various ways to measure "GDP". ** Click! ** If'n you hire a nanny, that's part of the GDP. If'n you look after your own, it ain't!

 

Pork Masala

Heidi & I have been trying the local Indian restaurants. Chicken Tikka Masala tasted so great that I figured I should be able to reproduce a similar (but simpler) dish at home, with pork ... sort of. Alas, it was okay ... but a disappointment: I should stick to visiting local Indian restaurants. My Pork Tikka Masala recipe. Note: Garam masala is a gaggle of exotic spices.

 

Indexes (again)

Since the DOW is proportional to the average of 30 stock prices and the S&P500 is proportional to the average of 500 market capitalizations, then what'd happen if'n we invent an Index which is proportional to the average of the gains, beginning at some convenient point in time ... like 10 years ago (November, 1999)? Suppose we try it, using the DOW 30 stocks. This "new" Index would look like so: The S&P is stuck in there for a comparison. I call the new Index the g-Index. The g stands for ... uh ... great. ------------------------------------------------- The justification (if any) for the g-Index is that, being ignorant of which stock will be the best performer, you'd presumably invest equal amounts in each stock. In that case, your portfolio would be a g-Index.

 

Indexes

To calculate the DOW Index, you add all the prices. It's described as a "Price-Weighted Index". Similarly, the S&P is described as a "Market-Cap Weighted Index" ... presumably because its calculation requires you to add all the Mkt Caps. I've always felt that describing these Indexes as "Weighted" was misleading. Perhaps that's because I was thinking "Weighted Averages". Perhaps that's the result of creeping senility. Anyway, now I'm happy. I see that the Gains are weighted averages - even if the Indexes aren't. Besides my confusion over the use of the adjective "weighted", I've always been annoyed at the use of a Sum of Prices to generate an Index. I imagine Berkshire-Hathaway as being a component of a 31-stock DOW. It's weight would be obscene. It'd generate 99% of the value of the Index. On the other hand, as the component of a 31-stock "Mkt-Cap Weighted" DOW, it's weight would be respectable.

 

Holy Books

I am often appalled, surprised and/or confused by conflicting passages from various Holy Books ... in particular the Bible and the Qur'an. I read here: "... whosoever killeth a human being for other than manslaughter or corruption in the earth, it shall be as if he had killed all mankind, and whoso saveth the life of one, it shall be as if he had saved the life of all mankind." Yet, I read here: "So when you meet in battle those who disbelieve, then smite the necks until when you have overcome them" Then I read [35]: "For I have come to set a man against his father, and a daughter against her mother, and a daughter-in-law against her mother-in-law; and a man's foes will be those of his own household. " Then I read [44]: "Love your enemies, bless them that curse you, do good to them that hate you, and pray for them which despitefully use you, and persecute you" Perhaps the only passage I fully understand is this one: that a husband is the head of the family and may beat his wife if she is disobedient. Though I often mention this divine edict to my wife, she just laughs ... and I fear I may be beaten if I persist.

 

Metric

Sometimes I wonder about this metric system, especially for temperatures. I see it's gonna be 27 degrees Celsius and wonder how hot that's gonna be. So I convert and get about 81 degrees Fahrenheit ... and I'm happy. Then I wonder how many countries are metric and how many ain't and find this map: Mamma mia! We is not alone!!

 

Veterans' Week: Nov 5 - Nov 11

In Flanders fields the poppies blow Between the crosses, row on row, That mark our place; and in the sky The larks, still bravely singing, fly Scarce heard amid the guns below. We are the Dead. Short days ago We lived, felt dawn, saw sunset glow, Loved, and were loved, and now we lie In Flanders Fields. Take up our quarrel with the foe: To you from failing hands we throw The torch; be yours to hold it high. If ye break faith with us who die We shall not sleep, though poppies grow In Flanders Fields. Lt.-Col. John McCrae (1872 - 1918)

Obama

Okay, so a couple of Democratic states went Republican ... as measured by the state governors. I'm not sure how a state's gubernatorial party relates to support for the White House. So I look at the situation when Obama won the White House: After exhausting exhaustive analysis, I conclude that the correlation is 45.678%. Jest kiddin'

 

Chandelier

One of our sons works for Harper's Bazaar. In his spare time he makes chandeliers (among other things). That may not seem so unusual, but they're made of paper clips ... thousands of 'em. This morning, he wrote to say that the Royal Ontario Museum will exhibit one.

 

same-sex marriage

Maine has defeated the same-sex marriage law that recently came into effect. So I wondered what worried those opposed to the law. I can understand the opposition on religious grounds. But then I read: "Same-sex marriage could be taught in schools. Teenagers will be encouraged to experiment with their sexuality. Same-sex marriage will become widespread. Gay marriage would undermine western civilization. Marriage is for pro-creation. (Does that mean couples should get divorced after a hysterectomy?) --------------------------------- Heidi and I recently stayed at a lodge ... where you don't gotta cook meals. They feed you. The owners (who did the cooking, etc.) are fantastic ... and gay. They adopted two great kids (who are now teenagers). I suspect they'd find the above concerns hilarious. Uh ... on second thought, they'd find them sad. --------------------------------- In The Netherlands, Belgium, Canada, Spain, Norway, and Sweden, same-sex marriages have the same status as opposite-sex marriages. In the following countries, something "similar" to same-sex marriage exists: Andorra, Australia, Colombia, Croatia, the Czech Republic, Denmark, Finland, France, Germany, Hungary, Iceland, Israel, Luxembourg, New Zealand, Portugal, Slovenia, Switzerland, the United Kingdom, and Uruguay. Click!

 

Photons

I just finished a book (SciFi) where particles magically turn into light ... that is, photons. That got me thinking ... a rare occurrence, it seems. I wondered if'n one could "see" the light generated. I think the answer is no.