It's that time of year again. Ghouls and goblins will be coming around asking for sweetness -- and that's just the political campaign pollsters. Scarier still are some of the trick-or-treaters who will be knocking on your door Sunday night in the juvenile pursuit of free candy.
Still, as a horror film buff, beyond my childish ways of accompanying my kids on Halloween to see whether I can round up Lemonhead candy or score anything that remotely resembles chocolate, what I really like about this time of year is all of the creepy movies that work their way back into the cable programming channels.
But have you ever sympathized with the baddies? It may have been a lot easier to relate to the classic Universal monsters than the more sinister slicing and dicing horror icons of today, but if you walk a mile in some of their shoes I think you will find that they share many of your investing traits.
Over the years you've been asked some pretty silly stuff in the name of self-awareness. What color is your parachute? Who moved your cheese? Paper or plastic?
So maybe what I have to ask isn't all that outlandish. As an investor, what kind of monster are you?
Dracula
Yes, Dracula would never be a day trader. The hours would bury him. However, his penchant for blood is legendary. Feeding off the misery of others, profiting from the red losses -- that's a short seller if I ever saw one.
Dracula knows how to pick his prey. If a stock sticks an inviting neck out, it's an easy target. If a stock is trying to feel its way through the darkness -- that's Bite City. Dracula relishes the carnage because that's his lifeblood, but the bond isn't necessarily emotional. It's not personal. It's just business.
Michael Myers
The slasher films were reborn -- if not downright pioneered -- the moment that Michael Myers escaped from a mental institution and began hacking away at his promiscuous neighbors in the 1978 classic Halloween. Yet investors can often take the Michael Myers approach to seeking out new stock ideas. Myers would get knocked around, even falling out of a second-story window, yet he always found a way to bounce back. You've heard of trying to catch a falling knife (and this is appropriate since it was also Myers' weapon of choice) -- and that's what a Michael Myers investor does.
She will see a stock drop precipitously -- let's say Marsh & McLennan (NYSE:MMC) last week -- and find a way to reason the selling as overdone. Sometimes a dead cat bounce justifies the Inside Value contrarian approach. Other times the salmon gets gutted when more bad news finds the stock falling even further.
The Creature From the Black Lagoon
While I have always felt that there really were no scary movies made until the late 1960s -- and, yes, I have seen Freaks, Psycho, and Nosferatu -- something always creeped me out about the amphibious creature who emerges from the murky waters to hunt down his next victim.
For our profiling purposes this is probably the worst type of investor. The stock trader who is submerged -- either maxed out on margin or simply buying equities with money that should have been earmarked for paying down mounting debt -- is far more gruesome than some guy in a fish suit. Amphibious investors, living above and below the waterline without ever reflecting on the difference, usually wind up all wet.
Frankenstein
We can probably agree that the wild mood swings behind the creature that Dr. Frankenstein pieced together and brought to life made him a highly misunderstood beast. However, there was one thing that this ultimately ephemeral monster feared the most, and that was fire.
Frankenstein investors won't touch the hot stuff. Mention things such as "momentum investing," and you will have lost them at "mo." Talk about relative strength, and they get weak at the knees. Unlikely to have followed into the Taser (NASDAQ:TASR) and Travelzoo (NASDAQ:TZOO) feeding frenzies, one can argue that there's more than just an Abby Normal brain in that noggin when flames go out.
Yet that doesn't excuse Frankenstein's monster from also cowering at the first dynamic spark of a company that will eventually erupt into a red-hot blaze. He will ignore the monthly stock recommendations of our Rule Breakers newsletter, showing that sometimes he is more nuts than bolts.
Freddy Krueger
When Nightmare of Elm Street introduced this boiler-room-bound assassin, the creepiest thing about Freddy Krueger was that he would reside in your dreams. That forced his victims into losing sleep, fearing what horrific mayhem he would wreak if their eyelids should come together in slumber.
So a Freddy Krueger is the type of investor that goes to bed with what seems to be butterflies in the belly only to wake up in the middle of the night with indigestion. Buying speculative situations with little time devoted to due diligence breeds this kind of scenario. If you find yourself losing sleep over your portfolio by night and checking your quotes every few minutes by day, you've got it bad. Here's a little children's ditty to help pass the time at night:
One, two, due diligence due.
Three, four, still you buy some more.
Five, six, where'd you get those picks?
Seven, eight, stocks depreciate.
Beyond the crypt
Naturally I have only scratched the surface with these critters. I guess that's what sequels are for. I never got around to werewolf investors that howl at the notion of aftermarket trading at night. We can't forget the demonically possessed head-turning Regan MacNeil for those who are able to show amazing dexterity in adapting to different investing philosophies until their heads spin.
What? I left out your favorite monster investor? My apologies. That's what happens when you try to scribe a seasonally relevant piece paying homage to a genre chock full of baddies. Have yourself an excellent Halloween this weekend, OK? Me? I'll be tending to the treats bag, digging deep and doling out stock picks and wondering whether I will ever be too old to trick-or-treat.
Longtime Fool contributor Rick Munarriz relishes a good horror film from time to time. While you may come away disappointed he has his top eight scariest films of all-time. He does not own shares in any of the companies mentioned in this story.
