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!

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