So today somebody told me “these companies own those and then these are owned by.. “ etc .. And I thought to myself “okay lets get to the bottom of this”. Some hours later I came to the conclusion that some 8 huge companies together own a massive amount of other small companies. Together they pretty much controls everything, or so it seems. Further more because they are so large, is it really possible for them to go under but at a “end of the world scenario”?
Basically what I'm getting at is that these 8 are so large that they cannot fail or .. if they should then it would mean a massive impact and also shift of power for the others. All of this across the globe. Even if some eventually disappear the others would swallow what's left and the power or money in this case should remain constant in the totality of it all.
Zero sum game investing
What am I talking about? Well when I think about investing I often use the term “zero sum game”, meaning the total amount of energy is constant or static and the owners simply just changes hands. Although it might seem that the values of currencies or companies go up and down, their individual valuations are also going in cycles. But how can we use this for trading?
So if and I say if we can buy everything in a global sense is it possible to lose money? This question has two parts so lets delve into it. To the first part of everything I am talking about all of it, encompassing all the companies or in the market all of the market. Now if that is possible to do is another discussion but this is it currently.
To answer the second part of the question about losing money, is that possible? Presuming we the first part of the question is possible to answer and true I claim that losing money or the investment if we call it that under these circumstances is impossible. Quite simply because of part one.
The selection
So far this is all jibba jabba so lets get into it. The companies I thought of are the following:
Nestlé
PepsiCo
Kraft Foods
Procter & Gamble
Johnson & Johnson
Unilever
Marston's
Kellog's
With stocks i'd go with these 8, if it was futures i'd probably buy one of each and with currency-pairs yes I would also buy one of each. But this example is with stocks so lets move on.
Own the complete package
So the idea is to buy them all, evenly. In a perfect world if they would be valued at a 100 each i'd buy 4 of them every month. Or at least plan to do so. Now take into consideration most of these, i'm not sure, also give some nice dividends so there is also that factor. Please note the actual strategy for what price to go for is not part of the discussion here neither is the “where to sell it”. But think of it this way; if these represent the entire global market (because they are so huge and encompass so much) the thinking is that we cannot lose money if part one of the hypothesis is true.
Rotating positions
I won't go into how to rotate the positions, I will only touch on it, only a little bit. Let's say that we own 9 shares of a particular stock and all of these are in profit by 5%. This is just an example and it's only to illustrate.
If I would simply close the positions here at 5% profit then that would be backwards because that would unable the benefit of more profits later on. So how to do it? Well what I would go for is to close lets say 3 of the 9 at a specific predetermined place, a previous high mark in price or at a resistance line from TA etc.. That way the closing of positions would follow the market pulse while freeing up more money to be used in the next round. Remember the idea was to buy 4 shares per month, if 30% is closed with profit during a month that would enable us to take additional positions. Thus giving us more shares then before, this while profiting both from the dividends and market movements.
It also has to be said that the allocation if equity to buy positions, while distributed across them all, would be shared this does not mean that we'd own then all in the same amount at the same time. This would have to be adjusted, and I think that goes without saying. So for example if I'd notice that we are heavy with positions in one of the stocks then we would have to consider to place extra emphasis into purchasing the others. Remember the idea is global balance.
Final thoughts
And with that, it is the end of this weeks ramblings. Maybe I'll try this out in the future who knows. Probably with some sort of combination using futures as well. We will have to wait and see, but for now I'm out. More madness next week I'm sure.
Basically what I'm getting at is that these 8 are so large that they cannot fail or .. if they should then it would mean a massive impact and also shift of power for the others. All of this across the globe. Even if some eventually disappear the others would swallow what's left and the power or money in this case should remain constant in the totality of it all.
Zero sum game investing
What am I talking about? Well when I think about investing I often use the term “zero sum game”, meaning the total amount of energy is constant or static and the owners simply just changes hands. Although it might seem that the values of currencies or companies go up and down, their individual valuations are also going in cycles. But how can we use this for trading?
So if and I say if we can buy everything in a global sense is it possible to lose money? This question has two parts so lets delve into it. To the first part of everything I am talking about all of it, encompassing all the companies or in the market all of the market. Now if that is possible to do is another discussion but this is it currently.
To answer the second part of the question about losing money, is that possible? Presuming we the first part of the question is possible to answer and true I claim that losing money or the investment if we call it that under these circumstances is impossible. Quite simply because of part one.
The selection
So far this is all jibba jabba so lets get into it. The companies I thought of are the following:
Nestlé
PepsiCo
Kraft Foods
Procter & Gamble
Johnson & Johnson
Unilever
Marston's
Kellog's
With stocks i'd go with these 8, if it was futures i'd probably buy one of each and with currency-pairs yes I would also buy one of each. But this example is with stocks so lets move on.
Own the complete package
So the idea is to buy them all, evenly. In a perfect world if they would be valued at a 100 each i'd buy 4 of them every month. Or at least plan to do so. Now take into consideration most of these, i'm not sure, also give some nice dividends so there is also that factor. Please note the actual strategy for what price to go for is not part of the discussion here neither is the “where to sell it”. But think of it this way; if these represent the entire global market (because they are so huge and encompass so much) the thinking is that we cannot lose money if part one of the hypothesis is true.
Rotating positions
I won't go into how to rotate the positions, I will only touch on it, only a little bit. Let's say that we own 9 shares of a particular stock and all of these are in profit by 5%. This is just an example and it's only to illustrate.
If I would simply close the positions here at 5% profit then that would be backwards because that would unable the benefit of more profits later on. So how to do it? Well what I would go for is to close lets say 3 of the 9 at a specific predetermined place, a previous high mark in price or at a resistance line from TA etc.. That way the closing of positions would follow the market pulse while freeing up more money to be used in the next round. Remember the idea was to buy 4 shares per month, if 30% is closed with profit during a month that would enable us to take additional positions. Thus giving us more shares then before, this while profiting both from the dividends and market movements.
It also has to be said that the allocation if equity to buy positions, while distributed across them all, would be shared this does not mean that we'd own then all in the same amount at the same time. This would have to be adjusted, and I think that goes without saying. So for example if I'd notice that we are heavy with positions in one of the stocks then we would have to consider to place extra emphasis into purchasing the others. Remember the idea is global balance.
Final thoughts
And with that, it is the end of this weeks ramblings. Maybe I'll try this out in the future who knows. Probably with some sort of combination using futures as well. We will have to wait and see, but for now I'm out. More madness next week I'm sure.
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