Insider Trading Moneyball
Recently I have been asked more and more about what Stockspikes.com really brings to the table. About what our mission and our vision is. About how we are different or how we can make a difference in a world filled to the rim with gurus, “professionals”, advisers, consultants, websites, etc. Private equity firms and angel investors have taken notice of Stockspikes.com and our approach and wanted to talk shop. Needless to say, we are not interested in creating a Fortune 500 company or taking money from wolves who will then tell us how to run our business. Nevertheless, the story I tell them is borrowed from a book or movie you will all recognize.
Stockspikes.com and Moneyball
A few weeks ago I watched one of my favorite movies again: Moneyball (2011). If you have not seen it yet, it is an unbelievable film adapted from an even better book published in 2003. ‘Moneyball: The Art of Winning an Unfair Game’ is a book by Michael Lewis about the Oakland Athletics baseball team. It walks you through how the team overcame adversity and its disadvantaged revenue situation (vs. the New York Yankees for example) by analytically selecting players for their baseball team based on specific statistics. Although he seriously stepped on the fragile toes of conventional baseball wisdom in the process, the Oakland A’s general manager, Billy Beane, managed to put together a competitive team in comparison to much wealthier teams. Well, Stockspikes.com plays stock market Moneyball by following Legal Insider Buying Activity.
Stockspikes in the Major League Stock Market
There are many ‘teams’ out there who play traditional ball on the stock market. All the investment banks like Goldman Sachs, JP Morgan, Morgan Stanley, etc. and traditional investors like Warren Buffet, George Soros, etc. They are the rich teams. One of the quotes of the movie that always stuck with me was: “If we play like the Yankees in here (referring to the scouting team’s meeting), we will lose to the Yankees out there (referring to future match-ups with rich teams).” Many of the investment banks and gurus have what you do not have yet: millions or never mind billions. Because of that huge pile of cash they have, they can play the stock market game in a traditional way. With big ticket slow moving stocks and lots of time/patience.
5% in a big stock can often take a while, but if you put in 100 million dollars you get 5 million dollars profit. Nice. Do you have 100 million dollars? The Oakland Athletics did not either. The baseball team also needed to get ready, they could not wait 30 years to become competitive. So how do you play the game with 50K, 10K, 1K? You play stock market moneyball. You find cheap stocks with key statistics that predict theoretical performance. Why would you not? The information is available out there and like Jonah Hill’s character in Moneyball, Stockspikes wrote an algorithm to automate the scouting process. We find relevant, high potential insider buys and take action in the same stocks. It’s safe, reliable, and fast.
At the end of the movie after the play-offs, Billy Beane gets a call from the Boston Red Sox. They offer him an extremely attractive job offer, but he declined and stayed with the Oakland Athletics. I have no interest in becoming affiliated with any huge investment bank. Stockspikes.com will always remain independent. Although I will never be nominated for an Academy Award as Best Actor in a Leading Role, I hope you understand now why Stockspikes.com does what it does. If you want to get the same alerts that land in our mailbox and the one from our premium subscribers automatically, subscribe for a Free Trial.