I CALL it the "Orang-utan Principle". Give everyone in Australia a dollar coin and ask them to flip it once a day. Anyone who flips heads stays in, and anyone who flips tails goes out. The people who flip tails put their coin in the kitty to be shared by those that continue to flip heads.
After one flip there are 11 million people who can boast that they doubled their money in a day. After 10 flips there are 22,000 people who have made 1000 times their money in 10 days.
Another 10 flips later and there are 22 people who have each flipped 20 heads on the trot and have each made $1 million out of $1 in 20 days.
Stop the clock and we have miraculously created 20 successful flippers and we swarm over them in our quest to succeed as they have.
We want to know what they know, how to flip tails and how to flip heads. We attend their free seminars on flipping and they sell us a $5000 course on how we too can become option flippers in just three days.
We buy their books. How I made $1m in 20 Days, Flipping for Dummies, The Idiots Guide to Flipping, The Intelligent Flipper and we read their columns in the Australian Flipping Review, The Flipper Magazine and The Smart Flipper. And they make hay while we soak up their every utterance.
Of course, the fact that 22 million orang-utans would have delivered exactly the same result is not the point.
Being a success in finance is not about being right, it's about marketing.
Everyone knows it's not possible to call the market consistently, everyone knows that the most anyone can ever do is best endeavours, everyone knows it's just business and a game, and you know what? They don't really care.
When it comes to predictions, it doesn't really matter whether it's an orang-utan, an octopus or Warren Buffett that makes the call, because everyone knows it's not a prophecy, it's not reliable and it's not true.
But we still want to hear it because it's entertainment, and being right, while desirable, is only part of the equation.
In fact, the only real crime for those in a position of opinion is not being wrong, it's not having one at all, and worse still, being boring.
Far better that an octopus tells us Spain is going to win the World Cup than a statistician tell us "I don't know". Far better a CNBC anchor shouts at us about the sharemarket with their big hair and ridiculous urgency than tells us "It's quiet in the markets this morning", and far better we have disagreement than agreement.
We have been through the Papandreou plunge, the summit ascent, the referendum rout, the Berlusconi bounce and the Italian bond yield blowout. From one headline to the next. The daily range on the All Ordinaries index is almost twice that of the 2003 bull market.
You never know what you are going to wake up to. Yet here we all are deliberating on every move, sagely rubbing our chins and making our grand pronouncements and there is not one among us who cannot prove himself both "hero" and "fool" on the same day.
It's like that TV series Survivor, you have to fly under the radar to win. This is not the time for aggressive opinions and baseless declarations of certainty, and if it wasn't obvious before, then it certainly is now, that the game for any successful investor is not about chasing the flipping orang-utans but about not doing anything stupid for as long as you can.
So stop looking for that grand declaration to be made and worrying about what you don't know and never will know until it's too late. Look at what you do know.
The outlook is uncertain and there is a new game in town. It's called trading the good bits and avoiding the bad bits.
That's as good as it gets for now. In which case, a lot of investors have to raise their game or hand in their boots.
It's not set and forget, it's duck and weave, and just for the moment, a bit more "duck" than ''weave''.
Marcus Padley is a stockbroker with Patersons Securities and author of the sharemarket newsletter Marcus Today. For a free trial, go to marcustoday.com.au. His views do not necessarily reflect the views of Patersons.
