Tuesday, May 12, 2009

ECH and the danger of spreading too thinly


More semi-random musings.

So as sit back and watch the bullish action continue (let's be clear here..I still say this is a bullish relief rally in the middle of a nasty bear market) and with currencies on my mind, I checked back to see how longer-term pick ECH (the Chilean ETF) has been getting on. Here's the chart....


...and here's the article dated Feb 26th and entitled "ECH: the easy way to play Chile's currency revival". So another 20%+ winner and I'm suddenly wonderful and in the green on another fabbo LatAm call...hey isn't life great and I love me and all that crap. Yep, you got it, there's a very large and stupid ego trap on offer here. The point is that I could have recommended 75 stocks and here, two months later, rattle off a list of 65 winners and only two losses and oh my gawd what an amazing person I am.

Except I'm not. Because if you start that game you can suddenly find yourself further down the line conveniently forgetting about the crappy calls and shouting from the rooftops about the winners only, especially if you like recommending 50% of the stocks on offer to Joe Public. And you start glancing at stocks before calling them a buy, not investigating them and finding hidden value (or hidden problems)....and that's really not my style.

So what's the point here? I suppose that there are a couple. For one thing:

Any fool looks cool in a bull

For another this humble corner of cyberspace is just one guy, it's not a comprehensive news service. Things like Baja Mining (BAJ.to) slip past, for example (you seen that thing fly these last few days? Wowsers!). I miss a nice snippet of news and catch up to it later. I decide something isn't so interesting (and say nothing) when others think it's big news. After all, I'm still just a dude with a blog here. No pretensions. Just a dude with a blog.

So personally speaking, if I start spreading myself too thinly and reco'ing this, that and the other stock (and claiming mega-analytical success afterwards having just mentioned them once or twice in passing) I don't think there's much point to the exercise. Therefore what I'm going to do, on the stocks side at least, is stick more or less to my tiny corner of LatAm junior miners, keep trying to rootle out quality over quantity and not worry my brain too much about telcos in Argentina, real estate in Brazil or palm oil in Colombia....or even when all mining boats rise on the same tide and the badduns climb just as much as the gooduns. I'm sure you readers can find better places on the interwebnetpipes for all those companies, anyway. DYODD dude.