Mad cows

One of the funniest trades I ever made was really prior to my effort to learn to be a trader. I had investigated trading methodologies just enough to be dangerous (to myself), had pored over the books of numerous companies, and finally settled on Wilsons The Leather Company as a good, safe investment. I bought a small stake in the company, and approximately 24 hour laters the hysteria in Europe over mad cow disease began. Interestingly, they burned the carcasses of the slaughtered animals, which apparently caused a spike in the cost of leather goods to the manufacturers, and Wilsons tanked.

I didn’t realize it at the time, but this experience may well have been extremely important in my developing a philosophy of trading. In the years since, I have always been biased toward trades that minimize the impact of sudden, surprising news.