… based on a combination of voodoo magic and uninformed intuition. I am not a professional stock picker person, which is why I’m only asking 10% of whatever profit you make by following these picks.
YHOO will drop by 50%
Currently trading at 28.35, Yahoo stock is up almost 50% today on the news that Microsoft is bidding some 44 billion to acquire them. I’m not sure this deal would be good for either Microsoft or Yahoo, but I’m almost certain that the deal won’t actually happen. It will get held up by monopoly objections, either in the US or in the EU. When it fails to materialize, YHOO will drop like a rock. This company is in trouble, and MSFT stockholders know it, which is why they’re shedding their shares like Carnival Cruise Lines sheds free drink coupons. Short this stock. Or don’t, whatever. I’m just a hack with a laptop.
APPL will hit 200
Apple stock took a beating, even before the market stumbled. People were disappointed by the lack an a new “iphone” at this year’s keynote, and Apple has become a buzz driven stock (just like a purpose-driven stock, only without the 90’s inspired acoustic guitar worship). Once the stock bottoms out though, people will start to remember just how well positioned this company actually is. Jobs is still at the helm, Ive is still designing new products, Apple still has like $28 billion in cash, just for walking around money, and they are the only company poised to make a serious bid at dominating home media for the next 50 years. Even if the market tanks, Apple will stay blue chip.
BLLN will make Stick a billion dollars
Ok, this one is probably not true, but still, you gotta love a stock that trades for pennies, and swings by 20% on a daily basis. Brilliant Technologies is the proud purveyor of Qtrax, an innovative model for free distribution of music with an ad-based revenue stream. They’ve signed distribution deals with all 4 majors labels (can anyone imagine that happening pre-itunes?). It’ll be interesting to see if they can actually gain market share against their primary competitor, which is stillstealing music for free.
Once again, I need to stress that this is just for fun, so that I can gloat in 12 months if I’m right, or delete this post if I’m wrong. Don’t risk any of your actual money on this. Go talk to a real pro instead.
I know a guy that sold Apple at $20 a share and was proud of himself when it fell into the low teens. Ooops.
I like thinking about and planning investment strategies. This following story is humbling to me though:
In 1988 the Wall Street Journal began a contest that was inspired by Burton Malkiel’s book A Random Walk Down Wall Street. In the book, the Princeton Professor theorized that “a blindfolded monkey throwing darts at a newspaper’s financial pages could select a portfolio that would do just as well as one carefully selected by experts.”
On October 7, 1998 the Journal presented the results of the 100th dartboard contest. So who won the most contests and by how much? The pros won 61 of the 100 contests versus the darts. That’s better than the 50% that would be expected in an efficient market. On the other hand, the pros losing 39% of the time to a bunch of darts certainly could be viewed as somewhat of an embarrassment for the pros. Additionally, the performance of the pros versus the Dow Jones Industrial Average was less impressive. The pros barely edged the DJIA by a margin of 51 to 49 contests. In other words, simply investing passively in the Dow, an investor would have beaten the picks of the pros in roughly half the contests (that is, without even considering transactions costs or taxes for taxable investors).
http://www.investorhome.com/darts.htm
Ok, I don’t know anything about anything, but I do know that my dear old dad bought a little stock here and a little stock there over the years and after I (the youngest of his three kids) graduated from college, he and my mom started paying wee bits more on their mortgage and when he retired a couple years ago, he had paid off their house in WA, then he cashed in a bunch of stock and bought an Excursion, 20 acres in Montana and a house on a river in Montana. He was able to do this, in large part, because until the purchase of the Excursion, the last new vehicle he purchased was his work truck in 1972, he and my mom never bought anything on credit and land is cheap in Montana. Still, it’s impressive. He barely graduated from high school and things were more than tight for several years when I was kid (think: hand-me-down clothes, free hot lunch, left-for-dead cars and government cheese. yum.) but apparently (like Sharolyn’s husband pointed out) one does not have to be a pro to make the stock market work in one’s favor. My dad is one smart monkey.
I’ll come and pick you all up in my Lear when BLLN makes my $150 dollar investment become $2.6 Billion. Then we’ll fly to Pebble Beach and play golf.
Put it this way, if BLLN goes to $600 like Google, my 1600 shares (that I bought at 6¢ a piece) comes out to just shy of $1,000,000. That’s one miiiiiiiiiiiillion dollars. Mwah ha ha ha ha!!
And we’ll need that much to keep living in CA.
June, what a great story! Here’s my two cents worth on the stock market. It’s a great long term investment. If you think you can beat it on a daily or monthly basis by doing a lot of trading or jumping in on a bit of “inside” information, or picking individual stocks, you’ll usually be sorry. Unfortunately, it’s a bit like gambling in that you always hear such great stories about “winners”. If you’ve got some extra money, that you can afford to do without if you lost it all, and you’ve got time (at least 7-10 years to let it ride up and down then up again) then OVER TIME the market is a great place to be! If you are going to jump in, Michael’s approach is actually the right way to go. Pick stocks that you actually know something about. In Michael and Stick’s case, that would be companies like Apple and BLLN where they can actually see trends emerging and know something about the technology and whose using it. Me? Getting too old to invest in risky things because there isn’t enough time to recover should things go south.
I wish I could contribute some advice to this column. But sadly, all my assets are tied up in cash.
Zack and I both own some Apple. It’s just that instead of stock it’s a macbook, a G5, a macbookpro, a mac mini, an iPod, an iPhone …
What is the dividend paid by an iPhone?
+3 Charisma
I did not know what the funny answer to my question was, but I knew that there was one. That was it.
This article at Slashdot suggests that the Qtrax distribution deals may be more marketing wishful thinking than reality.
On a related note, I also bought some Apple today, but like you guys, not the stock, but rather the 24inch iMac variety.
You might not be able to appreciate the awesomeness of M. Kelley’s last comment unless you know that he’s part of the software team that writes Microsoft Office for Windows.
Well, in all fairness, it will immediately have Vista installed on it as well, and Ubuntu shortly after that. But it will sure be nice to replace my Frankenstein machine that I’ve pieced together over the years with 24 inches of pure brushed aluminum dead sexiness.