I think I’ve done it. I’ve come up with a brand new measurement tool that could possibly be used for beating the stock market.
The quality of a company’s toilet paper.
I was in a public restroom a couple of days ago, and the quality of the toilet paper was among the worst I have ever had to deal with. After I left the restroom I started thinking about the experience and it struck me that a company that uses really low quality toilet paper isn’t being thrifty, they’re being cheap.
Plus, using low quality toilet paper could also be a sign that you don’t really care about your employees or your customers or your visitors; you’re more interested in saving a few dollars (and by a few I mean a really, really small amount of savings.
I’m thinking of personally going around to the headquarters of all Fortune 500 companies, and doing an evaluation the quality of the toilet paper. Each company would receive a rating of anywhere from one roll to ten rolls of toilet paper. A rating of ten would be reserved for just a small handful of products that pass all the parts of my rigorous testing methodology.
Once I have the ratings, I plan to run a regression of the number of toilet paper rolls against the profitability of the firm. My hypothesis would be that the relationship is positive and significant. In other words I would expect higher quality toilet paper to be associated with higher profits.
Assuming that the relationship turns out as predicted, then it may be possible to use this as a trading strategy. Companies with a rating of 8 toilet paper rolls would be on the buy list; those with a rating of three or less rolls would be on the sell/do not buy list.
I know it sounds overly simple, but I think it has merit. I think a company that buys high quality toilet paper is showing that they have sweated the small stuff. And it is that attention to detail that could make the company a stock market darling.
And if you don’t want to wait to see my actual trading program revealed, there’s certainly nothing stopping you from doing your own analysis.
So you can go ahead and ridicule me for such a suggestion, but when you see mme driving down the street in my new Dodge Stratus, you’ll know I’ve made it.
I guess this goes to show you that some of the best thinking of the day for some people happens in the restroom.
And for those companies that are using the low quality stuff, get off your butt (literally and figuratively) and invest in the good stuff. Your employees and customers will be grateful, and I think in a few years so will your investors.
P.S. I apologize if this post is incoherent; I was literally falling asleep while writing it, and have not gone back to see if there some errors as a result.
P.S.S. I know what most of you are thinking, ‘this post is no less coherent than your other posts…”, so why bother bringing it up now…