(Guest Post by Ranveer Panjabari)
If you own a share of stock, that means you own part of a company. If ExxonMobil has 4 billion shares of stock, and you own 1 billion of those shares, that means you own 25% of the company. As for me, I own one share of ExxonMobil. That’s all I need to feel like a total badass. I take my stock certificate to envoronmentalist rallies, I show it to everyone, and I say, “ExxonMobil, bitches! Fuck the environment! I’m a part owner of an oil company! The environment is for pussies!”
Some people give their money to investment experts–and those epxerts use that money to buy and sell stocks. It all sounds great. Until you find out how the average expert will make you 8% per year, while the average stock goes up 9% per year. That means that the average expert is mathematically proven to do worse than the average alcoholic animal. You can actually go up to an expert and say, “Your mutual fund went up 9%? Congratulations! That means you beat most experts, and you’re equal to a blindfolded orangutan who just drank 18 bottles of Pabst Blue Ribbon.”
The point is, when it comes to stock market investing, you can’t make more money than average just by listening to experts. Otherwise, everyone would just listen to experts, and everyone would make more than average. Which is impossible–because according to a dictionary, average means average. I looked it up. The dictionary didn’t say, “Average is a noun, and the defintion of average is ‘more than average.'” The point is, the concept of an average ceases to exist when the average of something is more than average–which explains why the average investor’s average return isn’t more than average, and the average investment stock expert doesn’t know his head from his ass.
Right now, some of you might be thingking, “OK. Fuck the experts. I’m gonna get financial advice from an orangutan.” That’s not necessarily a good idea, either. Orangutans smell weird, they drink way too much Pabst Blue Ribbon, and their stock picking performances are not consistent. I mean, my best performing orangutan in 2005 advised me to buy Borders and Blockbuster in 2006.
Here’s the real way to beat the stock market. FTSMM! Follow the Smart Money, Muthafucka! That sums it up. Right now, some of you might be thinking, “What the hell is smart money? And who are you calling a muthafucka?!” Let me break it down for you, muthafucka. Let’s say a stock seems like it’s worth $30, but it’s trading at just $20. It’s undervalued. No it’s not. There are a few rich guys in top hats who know what’s going on behind the scenes, and they’re the ones selling lots and lots of that $30 stock for the bargain price of $20–because they know it’s not even worth $10. You think you’re buying $30 for $20. And they know they’re getting $20 for a pile of orangutan manure.
In other words, there are lots of stocks out there that seem like bargains. Half of them are actual bargains, and half of them came out of an orangutan. “Seems like a bargain” isn’t the same thing as “is a bargain.” The smart money knows that. But your ignorant ass don’t know nothing about seems and is. The full formula is FTSMM! YIADKNASAS. “Follow the Smart Money, Muthafucka! Your Ignorant Ass Don’t Know Nothing About Seems and Is.”
What you need to do is buy what the top hats are buying, and sell what the top hats are selling. But how can you figure out where their smart money is flowing? I don’t know. Ask your mama. My ignorant ass don’t know nothing about no smart money.