On Business and Bias

First, a good lesson in business conduct from one of the most underrated films of all time, In the Company of Men:

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[youtube:http://www.youtube.com/watch?v=9cZsNK6-0ts 550 412]

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Next, another blogger recently wrote an article in The Washington Post analyzing how a given political bias can often hinder your portfolio returns.  I am not going to say his name, because he has never linked to iBC…ever (HINT: His name rhymes with Larry Mitholtz) : UPDATE: Pardon me, Mr. Ritholtz did, in fact, link to The Fly back in 2008

Now, with that idea in mind, let’s return to the headline of AOL buying out the politically left-leaning Huffington Post last week. I wrote this post alerting you to the fact that while AOL was in a steep downtrend, it was rapidly approaching a firm support area since the stock went public for a second time a few years ago. How the stock reacted to this sub $20 zone would be very telling.

Fast forward to the end of this week, and we can see on the daily chart below that AOL printed a classic dragonfly doji candle on Thursday, with bullish confirmation on Friday. After a steep downtrend, a dragonfly doji often signals an imminent reversal in trend, much like the hammer candlestick. With Friday’s upside confirmation, AOL represents a textbook long swing entry here. Any political bias against the left-leaning rag may, ironically, impede your capital from growing.

Disclosure: I have no position in AOL.

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