What Jackie Chan would do in a market like this

Posted Jan 17th 2008 5:57PM by Zack Miller
Filed under: International Markets, Television, Personal Finance, Commodities, S and P 500, DJIA, Film

I happen to love Jackie Chan. My kids do as well. Just as we watch family movies together as a family, we also talk about investing. While I have not yet started discussing the benefits of writing covered calls with my 4 month old, I do talk about investing basics with my older kids. They clearly understand that "stocks go up and they go down." Why is it so hard for us to handle bear markets -- we know they come.

Anyway, I started to think how martial-arts master and family favorite Jackie Chan would deal with our current topsy-turvy market.

One of our favorites is Drunken Master, a film whose plot centers on a young and mischievous Wong Fei Hung, played by Jackie Chan. He gets into trouble in a variety of ways, including showing up an overbearing assistant kung fu teacher, unknowingly making advances on his own cousin, fighting with his aunt, and beating up the son of an influential man in town.

Chan tends to:

Always underestimate his own potential: Chan seems to not fully recognize his strength and his power. He seems to succeed in spite of himself. Chan would recognize that after inflation, the US stock markets have returned about 7% per year since the 1920s until today. There are down periods and up periods. Chan would probably utilize down periods to load up on ETFs like the iShares S&P 500 (NYSE: IVV) and the Vanguard All-World Ex-US ETF (Amex: VEU)

Resourceful: Chan never seems to lose his composure, even in the face of adversity. When everything is seemingly in shambles, Chan finds a way to maneuver. His resourcefulness would compel Chan to double-down on investing in resources. In spite of sinking commodity prices, Chan would probably recognize there is a huge supply-demand imbalance in most global commodities. He'd follow the commodity master, Jim Rogers, by committing a chunk of capital to the Jim Rogers International Commodity Index (Amex: RJI)

Adapts to his surroundings: Chan is renown for dealing with what comes his way. He'd be a master trader in the market, taking what the market gives him, both on the long and short side. In a market that's feeling very heavy, he might decide to hedge his bets with a little Proshares Ultra Short S&P 500 (Amex: SDS) and the Proshares QQQ Ultra Short (Amex: QID). There is even a dividend to boot.

It's times like these that amateur investors can truly learn from a master like Chan.

Zack Miller the managing editor of IsraelNewsletter.com and a former equity analyst for a leading multinational hedge fund.

Tags: commodities, commodity, etf, investment strategy, InvestmentStrategy, jackie chan, JackieChan