Sunday, October 12, 2008

Announcing the "Piss-Pot Index"

As I've mentioned before, I've been all but living on the finance pages lately, most notably at The Big Picture. There is a lot of speculation on where the bottom of the market will be. I spent the early part of the week putting together what I was tentatively calling "The Doomsday Index". It would be a way to know when the market has truely hit bottom. On Wednesday, I found this post. It's about how new finance-related blogs are popping up on the internet with various doom and gloom themes. It's an indicator that investor sentimemnt is nearing the point of capitulation. The point at which those who are going to get out have left, and conversly, the point that those who have been out get back in.

In the comment section was this little gem:

"Posted by: jdamon Oct 8, 2008 12:50:37 PM

BTW, just because most of you who frequent this site don't have a pot to piss in, doesn't give you the right to gleefully run spout your mouths off that everyone deserves what is happening.

I for one have paid my house off long ago. So, I'm getting the sh*t kicked out of me because these asshats in Cali and Florida and even Manf*uckinghatten bought homes/condos they couldn't afford. Who suffers the most - f*cking fly-over country that's who."

As you might imagine, the liveliness of the comment thread picked up considerably after that one.

I've also been reading "Strategic Index Investing" by Richard D Romey. It's about Exchange Traded Index Funds (ETIF), a subset of ETF's. Aside from being a good way to diversify, they are a good indicator of where to look for individual stocks. If (like me) you're too unsophisticated to play anything but the long game.

And, it led to an evolution in my thinking. Why not the Piss-Pot Index (PPI)? It would be more direct, and to the point, to call it the IPP, but think of the PPI as a more poetic way of expressing the same thought. It will be unscientific (like me), unsophisticated (like me), and of questionable value in the overall sceme of things (well...).

There are 2 things I think we can say with some degree of certainty.
1) At some point the dust will settle.
2) When it does, things are going to be very different.

I'm looking at 5 different sectors of the economy, any one of which might do well, or even lead the recovery. They are:
1)Consumer Staples-food, soap, and booze
2)Energy-we'll still need some
3)Health Care-it's not in the news anymore, but we're all still getting older
4)Technology-still our strong point
5)Commodities-always a good barometer

With 4 index funds per sector, we get "The Piss Pot Twenty".I'm still working on the spreadsheets and graphics, but until then, here's a look at the carnage:


SymbolCurrent Price1 week % G/(L)4 Week % G/(L)
DPN19.56(13.72)(21.98)
VTC57.30(14.72)(17.81)
XLP23.60(13.33)(14.80)
FXG15.38(07.74)(13.89)
FCG12.49(25.07)(30.07)
IEO33.60(29.90)(47.21)
XOP26.46(29.85)(49.13)
GEX24.85(29.14)(46.35)
IHI44.11(19.24)(27.33)
PJP13.88(17.38)(21.93)
XBI48.10(16.52)(22.82)
IYH50.23(17.07)(22.02)
QTEC12.45(16.78)(29.06)
IYW38.09(13.55)(25.02)
RYT30.15(15.12)(27.65)
DBT14.14(19.43)(31.95)
IAU83.270.63(03.47)
DBB15.96(14.38)(24.75)
UAG19.38(09.86)(08.71)
JJC31.03(16.70)(31.74)

5 comments:

http://texex-xpress.blogspot.com/ said...

I'll give you an easy, fun, and enjoyable investment that we got a return of 60X this year. It also helps the environment, reduces energy consumption, helps with the CO2 problem, and is delicious.

I'm talking about home veggie gardens. Which can be raised in cast off 5-gallon buckets and some dirt.

For a $3 investment in tomatoe seeds we got back 60 lbs of fresh veggies X $3/lb = $180. And that's not counting our beans (pun, pun) cukes, peppers, squash, potatoes, herbs, carrots, arichokes, etc. And we composted for an even better garden next year.

So while you're laughing your butt off now, you'd be smart to start scrounging around for 5-gallon buckets over the winter.

btw, I tried planting a T-bone to raise a cow but still have some kinks to work out yet.

Local So-and-so said...

Who's laughing? The rich shouldn't be the only one's profiting from this. You know they will. They always do. When the buyers market arrives, I'll be there too.

The WW2 era victory gardens are about to make a come-back. I'm just not sure where in my apartment to put one. If you have any luck with your t-bone experiments, let me know. I think I could fit a cow on my porch and there's plenty of grass clippings available for the taking.

http://texex-xpress.blogspot.com/ said...

Anything but a north-facing patio will work - even a sunny bedroom. And you can multi-crop in a bucket with tomatoes growing up and carrots/radishes/herbs/onions/chives on the bottom. And things keep better on the vine or in the ground than the fridge.

So keep an eye out for free buckets at restaurants or from painters and I'll tutor you into becoming a farmer. You'll have to become a zillionaire in the market on your own but even Buffet and Gates have to eat.

Pasadena Closet Conservative said...

America will bounce back. We always do.

Local So-and-so said...

Tex, I'm seriously thinking of taking you up on the offer.

Maybe some grow lights in the closet? I knew a guy back in the 70's... ok, never mind.

Yes Pasadena, we will bounce back. The question is when. We've also had hard times before. It's best to prepare for the dip, so we get to the bounce.