Defrag advisor and friend, Paul Kedrosky likes data.
Several months back, we were joking via email about “contrarian indicators” - or the idea that you can derive useful intelligence by going against a prominent opinion. So, for example, when Time magazine puts a “recession” on the cover, you should go “buy” the stock market (or, conversely, when Barron’s puts the “bull market” on the cover, you should sell).
I joked with Paul that I was going to start tracking a “contrarian jason” indicator — or a buy signal based upon the idea that when Jason Calacanis mentions the recession, its a good time to “get long.” Now, for the record, I’m just poking fun at Jason - I’ve actually never met him (I think we’ve emailed once or twice), but he just seemed an easy “contrarian” target because he is so vocal, so well-known and so “mainstream” in the small world that is tech alpha geeks.
My indicator is based upon getting long (buying) the Nasdaq composite on any day that Jason mentions “recession” in a negative sense on his blog, twitter stream, etc - and then holding that trade for 30 days (with an assumed “sell” at the end of the 30 days). Like I said, just some good, ole-fashioned, fun with data!
Here are the results, so far (all results hypothetical, not tested with real money):
8/20/07 Trade initiated; closed out for a 5.8% gain.
3/3/08 Trade initiated; closed out for a 4.6% gain.
3/4/08 Trade initiated; closed out for a 4.8% gain.
3/6/08 Trade initiated; closed out for a 5.0% gain.
4/14/08 Trade initiated; still open — currently sitting on a 5.8% gain.
As you can see, the contrarian jason indicator is hitting it outta the park! Obviously, no one should take this seriously, or actually trade based on this - but I will continue to watch the “contrarian jason” — though the question is now open: if jason knows about the contrarian jason, does it spoil future results. And secondarily, can the contrarian jason also act as a sell signal (or a “get short” signal).
Fun with data on a Friday!
