Letter 32: Sacrificing to the gods, the story of gold demand, Atna’s Pinson disappoints (slightly)

Portfolio Performance

 Portfolio Composition

Shaking it up

Things weren’t exactly peachy for me this week.  Rarely have I felt more confused about what sectors I should invest in then I do right now.

One of the best gauges of just how divided I am is the number of stocks I have in my portfolio.  This got up to 20 stocks on Thursday this week.

20 stocks is silly.  I’m not running a mutual fund.

Anyways, on Friday I sacrificed a number of these positions to the trading gods.

A sacrifice to the trading gods?

A sacrifice to the trading gods can be anything from selling a few shares of a single company to wiping out a number of positions in a sort of sacrificial blitzkrieg.

When things aren’t going my way and I am feeling confused and disordered, quite possibly the cause of such troubles is that I have upset one of the trading gods.  In such a case, it is necessary to appease these gods by “sacrificing” one or more positions as atonement.

On Friday, in the midst of another crummy looking day, I did just that.

In my actual account I also liquidated Second Wave Petroleum.  I came within a hairs breadth of selling OceanaGold, Golden Minerals and Canaco as well, but I decided to stick with them (for now) because it just feels to me like gold is on the verge of a move up.  There may be a second leg to this sacrifice yet.

So what is this superstition all about?

Well on the one hand the sacrifice is about gods and reconciliation and bowing to the higher power.  You don’t mess with the supernatural.

On the other hand, there is a method to this seeming madness.

Let me tell it like this.  I was listening to Radiolab this week.  Help!   That was the title of the program.  The episode had a story about a young man who had “lost his life to a coin toss”.

What, you say?   Well that was what the reporter that overheard the remark said, and so he set out to track down the poor, life-less man that uttered those words and to find it how it was that a life could be lost by such chance.

As it turned out the young man managed a massage parlor.  It had been his fathers business and he had taken it over.  A number of months (maybe years) before his father had come to him and his brother and told them that one of them had to take over the business.  The father didn’t care which boy took it over, but it had to be one of them, and the boys had to figure out which one would be it for themselves.

Neither of the two brothers was very excited about the prospect.  After sitting on it for a few days, hanging over their heads, finally the one son couldn’t take it any more.  He proposed to his brother that they make a bet on who had the most tea leaves float to the top of their next cup of tea.  The one with the most tea leaves would walk away clean.   The loser would take the business.

Well the bet was made and the tea leave floated.  The brother who lost the bet was despondent at first, but he begrudgingly took his place.  He had to be dragged to the massage parlor for work by his father, and he had to be forced to work on his own father’s feet until he became proficient enough to work on the clients.  At first he hated it, but over time his attitude changed.  Soon he began to like the interaction with people, the sense of performing a service, he felt good about having happy clients with happy feet.  He began to relish his job, coming in weekends and working late nights.  He no longer regretted his decision.

Now here’s the interesting part.   When he was asked about the bet by the report, he replied that it was luck of the draw.  But his brother said something enitrely different.  His brother said he would have never have let that bet decide for him whether he would take over the business or not.  The bet wasn’t going to make the decision for him.

But not so for his brother.  He believed that the bet was never about him anyways, it was always about his brother.  His brother, he says, deep down wanted to manage the massage parlour.  He couldn’t admit to himself, and definitely couldn’t bring himself to admit it to his father.  The tea leaves helped him along, gave him the reason to do what he should do but did not want to come to grips with.

The reporter went back and confronted the brother now running the massage parlor with this theory. He didn’t deny it.  On the one hand he wouldn’t say that he set up the whole gig with the tea leaves just to have an excuse.  Of course not; he couldn’t say that.  But he also wouldn’t deny that the tea leaves had led him to act as he really wanted to act.  “I probably couldn’t have done it without the tea leaves, he says, but once the tea leaves had spoken then I had no other choice.”  The tea leaves made him do what he knew needed to be done.

And that’s why you make sacrifices to the trading gods.

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