Beating the market by trading like a sociopath (part 4)

My recent purchase of Scholastic stock illustrates these principles well.  Scholastic is a well-known children’s book publisher.  Because I have some exposure to the publishing industry through work, I understand how unlikely it is that any book will ever make it to the public domain.  I know that Scholastic has book fairs at schools, children begging their parents to buy them a whole stack of books and parents unable to deny children the simple pleasure of reading.   Parents are nostalgic and force their children to read the same books that they read as children.  Scholastic happens to publish the Harry Potter series in the U.S.—seven separate books all being sold to every young reader for the next century (my several siblings read Harry Potter to their grade school aged children every night together as a family).  Scholastic also publishes the crossover hit “The Hunger Games”, which was being made into a movie just at the time I decided to buy.  I looked on Yahoo Finance and learned that the last activity from an analyst was more than 5 years ago.  The stock was primed to go zeitgeisty with the movie being the trigger to give the stock the requisite buzz and “it” factor for the stupid money.

I bought the stock, two days later the company updated their earnings estimate to account for a huge run up of sales for the Hunger Games books (a trilogy, so three books sold to every interested customer).  In two days I saw the stock go up 14% to a nine-year high, drawing the attention of not just hundreds of investment bloggers but the Wall Street Journal and other financial heavyweights.  In my opinion this lured in some of the so-called “smart money” and we still haven’t even plumbed the depths of the stupid money, which will reach its peak as the movie profits soar and people start worrying that they’re missing out on another “Harry Potter” boom.

This is my best attempt to describe what I believe is a unique vision.  Most of the time I don't even consciously think of these thinks, I just intuit and act upon them.  When I look at the world, the flaws or vulnerabilities in people and the social institutions that they’ve made jump out to me, as if they were highlighted for me and only me to see. I have such an uncannily accurate ability to gauge probabilities and to discover patterns in human behavior that I sometimes appear psychic.When ever you buy or sell a stock, I may very well be on the opposite side of that transaction.  I understand that might be a little little scary.  You should know that I intend to exploit that fear.