Long or Short Capital

The results for the TradingMarkets/Playboy 2006 Stock Picking Contest are finally in, with Deanna Brooks amassing a huge return of 43.43% on her portfolio. The premise was to combine models and charity as a way to promote the kind of active investing around which TradingMarkets builds its products. TradingMarkets.com claims to be “a financial information company that works with institutional and individual traders in helping them improve their trading.” I guess “purveyor of black box technical trading products to wannabe day traders” doesn’t sound as sexy.

Dorkins:

We advocate active investing as opposed to buy and hold. We do think [the performance of the playmates] is sort of a reflection on the buy-and-hold industry that shows that anyone can come in and do just as well or better than a supposed expert.

I’m sure he is familiar with statistics which, used properly, would indicate that there would be a high probability that some members of any sample of stock pickers will beat the S&P 500. Frankly, I’m not even sure he is familiar with numbers as the Playboy Model Composite underperformed the S&P 500 by a decent amount without adjusting for risk. Given that most models picked 3-4 random stocks, adjusting for risk would show that investing with the S&P 500 would have been a dominant investing option over investing in a portfolio of Playboy Model PM’s, a shocking and surprising result.

I am sure the majority of this site’s readers have been following the playmates more than their portfolios. Exploiting hot chicks that show their boobs is an excellent way to raise awareness for charity and forcing men to look at the stock market, or at least the boobies which are standing next to the stock market. But it’s apparent that this stunt was not for charity or even to boost the visibility of TradingMarkets.com. It was simply a way for this guy, Ashton Dorkins, to finally see in real life a woman he had also seen in her nude suit, blending his porn with his real life, to create a synthetic sexual experience.

Dorkins also said:

The ones that did very well picked stocks that they are familiar with. That goes back to the point that stock pickers should pick the stocks of companies they understand.

It is true that investors should make long or short choices about stocks which they are familiar with, especially when presented with a stock you are familiar with and a stock which you are not. If the opposite was true, then the yacht Mr Juggles bought with the money he has been paid to get familiar with companies would seem even more ludicrious than it already does. But Dorkins’ statement does not mesh with the reasons Deanna Brooks gave for her decisions:

Hauppauge Digital (HAUP), I’m a tech head my self, so anything that advances something like TV on your computer…you get my drift…

Pfizer (PFE), I like staying healthy and alive (and I think most people do!)

Yamana Gold (AUY), What girl doesn’t like a little bling? I’m hot for gold this year…

Petroleo Brasileiro (Petrobras) (PBR), Ok, I do own 2 hybrids and I’m pro-eco/ recycler/tree hugging liberal, but…oil is making money…(maybe I can buy my next Hybrid with the profits…)

IBM (IBM) Hey I’m emailing you on my computer aren’t I…they (computers) aren’t going away.

Maybe “familiar” is spelled differently in model-speak.

Recommendation: The real lesson of this story? Even if your point is wrong and stupid or your firm’s product expensive and terrible, it never hurts to bring in boobies, the zero downside asset class. Short Dorkins, Long boobies, Long long.

Note: This all presume Ashton Dorkins exists as a live human being. He may in fact just be an amalgam of digital nerds (or Nerd CEOs) which only exists in digital form like that terrible movie with Al Pacino. The name sounds made up, as no parent would give their child the name Dorkins — they would sooner change names or kill themselves than create progeny so endowed.