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The Reformed Broker

The Beastie Boys and the fine art of stock trading

The Beastie Boys' Paul's Boutique was a masterpiece of sampling, which is a great way to unearth stock-trading ideas.

By Joshua M BrownGuest blogger / March 23, 2010

The Beastie Boys appeared at the MTV Latin Video Music Awards in Miami in 2004. Their second album, Paul's Boutique, is a masterpiece of sampling, which is not a bad method for finding investment ideas.

Nicolas Khayat/Abaca Press/KRT/Newscom/File

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I don't have a trading style. Or an investment style. I steal snatches of ideas and rationales and entries and exits and looks and strategies and research and opinions and target prices and bear cases and I weave them into something bigger than all of them individually.

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When putting together a portfolio or navigating a particular market, I sample.

In the summer of 1989, the Beastie Boys put out their legendary second album Paul's Boutique, a masterpiece that represents the pinnacle of sampling, the art of creating something new from disparate pieces of music and snatches of audio. Produced by the Dust Brothers, Paul's Boutique featured a mindblowing 105 samples, combining loops, drum beats, bass lines, vocals and guitar flourishes from Led Zeppelin, Elvis Costello, James Brown, Pink Floyd, The Beatles, Isaac Hayes, Johnny Cash, Jimi Hendrix, Kool & The Gang and the Isley Brothers to name a few. This album could never be made today due to new sampling laws that went into effect soon after its release.

This world is a better place for its very existence.

The eclecticism on display on that record has played at least some part in my own desire to use or be influenced by the best of what's available around me in my daily life. When putting together an investment or trading idea, I feel absolutely no compunction whatsoever about borrowing and stealing components of the thesis from as many sources as possible.

I will take the case for a company being in a position to report higher-than-expected margins for an upcoming earnings report and marry it with an ideal entry or buy price based on an exponential moving average. The former scrap of intel may come from the sell-side research department of a bulge bracket firm, the latter may come from a swing-trading blogger who posts his buys and sells to a Wordpress blog.

I may discover from a bit of Bespoke or Morningstar research that a certain industry group has drastically underperformed a broad-based market rally. From there, maybe I find out which mutual fund manager specializes in that sector or industry and discover based on 13F filings what his favorite names in the group are and why. Of that group, I may come up with one or two stocks that make sense to me and from there, maybe it becomes a question of relative strength or some other chart-derived measure of supply and demand.

I will take from anyone or anywhere and oftentimes I will construct actionable ideas only by weaving data and color together from a variety of sources.

Paul's Boutique stands as one of the greatest records ever made and its tapestry of sounds and samples can never be recreated by anyone. Fortunately, as traders and investors, we don't have those restrictions. If you're doing something profitable and interesting in the market, I will sample you. Consider it an homage.

Paul's Boutique Sample List by Song (PaulsBoutique.Info)

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