Vice Psych: How one man banks of fear and loathing

I recently sat down with my friend Kent and listened to his familiar rant.

Markets are about feelings. Are you in touch with your's Midas?

Kent's got a Master's in Psych. He's never worked a day in finance. Kent is one of the most successful investors I have ever met.

Kent's magnum opus on investing comes up in the news from time-to-time. He's a VIX man thru and thru. Playing off volatility, which he reasons is caused purely by psychological factors.

As a guy who has generated better returns for his own pocket than most Hedge Fund managers have for their clients over the past decade, Kent is quite opinionated...to the point where most people hate talking to him. On occasion, this includes myself.

Since 2000, however, Kent's returned 20% year in and year out...playing on your emotions...and mine.

Take a quick trip with me monkeys...into the mind of a madman...

The Pay Content Section

Some of Kent's views and plays are pretty unbelievable...sorry, I won't be sharing them with you guys. I just don't feel comfortable propagating the ideas of a man who belts out comments like the following with supremely dismissive confidence:

Psychotropics will be bigger than cash...Osmium is the new Platinum...let's make a market in sea shells...

Though I laugh and roll my eyes, as well...there's no denying that the guy's doing something right.

There is one reasonably safe bet that I and the mad scientist agree on, however. For those not worried about sideways stares at posh dinner parties when the subject of personal investing comes up...I would certainly recommend it.

The Vice Fund

Everyone is prone to strong feelings in uncertain times. Those who keep a level head are likely to be rewarded. That having been said...if we combine the fear and volatility which are rampant today...with man's need to soothe his nerves...

What better investment vehicle than a fund focusing on booze, cigs, chicks and the odd stick of dynamite?

The discriminating eye of any American traveler will notice that you can buy a pack of Marlboro's at 1940's prices in most of the world...

Smith & Wesson didn't just get a boost from Obama's inauguration...

Porn may not be recession proof but can still be relied upon...

and Johnnie Walker?

Well, he just may be the one American that is still popular in all corners of the globe.

Long story short...the one absolute you can count on during a recession is people's penchant for getting trashed, getting their rocks off and causing some collateral damage.

You can park your safety dollars in the bank or in bonds if you'd like...

Kent and I will be packing ours in a carton of Marlboro reds and wrapping them in trip wire, thank you very much!

Comments (10)

 
Nov 29, 2010 - 12:37pm

Midas,

Vices are a reasonable investment. I keep mine pretty simple in terms of how I invest in vices. If it has its own federal agency specifically dedicated to it, it's worth checking out. No matter where you are, people will always purchase something watched by the ATF. In good times or bad, people will still drink, want to own guns and smoke or chew tobacco.

In a recession, truth be told, the only good investments are in Lawyers, Guns and Money. Lawyers are there to cover your ass. Guns are there to protect your ass. And money... well, that's just there as a little bit of fallback if the first two don't work.

That's also the reason why I avoid picking up waitresses when I go out. Every time I go home with one, I've somehow ended up getting involved with the Russians or gambling in Havana. Either way, I get to spend a little time hiding in Honduras while the Lawyers, Guns and Money get me back in the clear. And yes, I'm an innocent bystandard here, just a little down on my luck.

 
Nov 29, 2010 - 1:31pm

Frieds:
Midas,

Vices are a reasonable investment. I keep mine pretty simple in terms of how I invest in vices. If it has its own federal agency specifically dedicated to it, it's worth checking out. No matter where you are, people will always purchase something watched by the ATF. In good times or bad, people will still drink, want to own guns and smoke or chew tobacco.

In a recession, truth be told, the only good investments are in Lawyers, Guns and Money. Lawyers are there to cover your ass. Guns are there to protect your ass. And money... well, that's just there as a little bit of fallback if the first two don't work.

That's also the reason why I avoid picking up waitresses when I go out. Every time I go home with one, I've somehow ended up getting involved with the Russians or gambling in Havana. Either way, I get to spend a little time hiding in Honduras while the Lawyers, Guns and Money get me back in the clear. And yes, I'm an innocent bystandard here, just a little down on my luck.

You forgot the most important part--taking a little risk when the shit hits the fan!

Metal. Music. Life. www.headofmetal.com
  • 1
 
Nov 29, 2010 - 12:46pm

Midas, which Johnnie are you? Black? Gold?... Blue?... Green (it couldn't be)?

Kent sounds like a real chap; always good to have friends around who challenge your opinions.

A couple points to bring up:

  1. Vegas gets owned in the past two years and Macau gets busy.

  2. Porn star considers run for (

    ) U.S. Senate.

Interesting times. Maybe I'll start to dabble in a 100% VIX/psych strategy...

In 1976, James Hunt broke the sound barrier through Eau Rouge only to retire before the event finished... following the race he had sex with three Belgian nurses at the clubhouse near La Source.
 
Nov 29, 2010 - 1:19pm

@Frieds,

Russia...Cuba...Lawyers...Guns...sounds like one of my dreams...or am I just having a flashback?

@James

SURreal is more like it...what do you say about a guy who requests to be called "Brockman"...btw, you can have Stormy, I'll take candidate Mary Carey.

@Eddie

That's psychedelics and what's with this fiat silver +1 garbage? You've got calls...EXERCISE'EM!

 
Nov 29, 2010 - 1:23pm

@Frieds

Best T-wso/">shirt I have ever seen "ATF...who is bring the nachos"

@Eddie

Shrooms + Van Gogh Museum = single best day of my adult life

@Midas

Everything you touch seems to turn to gold....interesting

If I had asked people what they wanted, they would have said faster horses - Henry Ford
 
Nov 29, 2010 - 2:02pm

Midas,

Maybe... My advice if your not sure is to try and make the moves on a Waitress and see how it goes.

James,

As long as the candidate is smart, reasonable and presents a viable platform with realistic goals and is willing to actually represent their state instead of following the lobbyist agenda, I am down with someone run even if she is a retired porn starlett.

Pfalzer, SB for you.

That's why I was hiding in Honduras in the first place. Took a bit too much risk and then shit hit the fan, now I'm down on my luck.

For the rest of you monkeys... Here's your moment of Zevon:

 
Nov 29, 2010 - 5:51pm

Frieds:
Midas,

My advice if your not sure is to try and make the moves on a Waitress and see how it goes.

LMAO, both the irony of someone telling the supreme server abuser of this board something of the like and your capitalization of a beer wench's title lead me to believe this topic will make for some interesting conversation later on.

 
Nov 29, 2010 - 8:19pm

Midas Mulligan Magoo:
@James

SURreal is more like it...what do you say about a guy who requests to be called "Brockman"...

A die-hard Simpsons fan... or Harry Shearer.

Frieds:
James,

As long as the candidate is smart, reasonable and presents a viable platform with realistic goals and is willing to actually represent their state instead of following the lobbyist agenda, I am down with someone run even if she is a retired porn starlett.

I can agree with this to a certain extent. Personally (albeit, a little idealistic), I'd like to see a Senate candidate assume all the traits you listed above along with some sort of previous public service experience. Ms. Porn Starlet could have the platform down pat but working on a foreign relations deal in the U.S. Senate is the big leagues compared to working a deal with an agent on which hung male actor gets to share the money shot scene.

In 1976, James Hunt broke the sound barrier through Eau Rouge only to retire before the event finished... following the race he had sex with three Belgian nurses at the clubhouse near La Source.
 
Nov 30, 2010 - 10:58am
Metal. Music. Life. www.headofmetal.com
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