Looking at Tiger Woods, Oil, Sirius, Airlines, Salesforce.com, RIMM, Nintendo and Yahoo today has me thinking about momentum. It’s all around us and a profit miracle for small investors. Yet, small investors have no clue it seems. They watch CNBC, read USA Today and subscribe to trading services for green lights and red light signals.
Here is how momentum has reared it’s profitable but sometimes deadly head just the last few days:
1. Tiger Woods – his announcement of a season ending injury is an outlier event. Sometimes momentum just ends with a bang. I was twittering the other day that Golf and Tiger Woods were at all-time highs. Nike too. NOT. The golf dip buyers will come out of the woodwork as golf implodes for the next 12 months, but barring Tiger’s appearance or change of status, the trend is OVER! Bull to Bear in one day. It sucks, but if you can’t grasp this, don’t ever invest your money.
2. Oil – forget everything you think you know or need to know. If you learn to embrace momentum, you have owned this gorgeous trend. I can’t say oil will continue, but another trend is starting somewhere today so if you are not a hog and have some sell rules, it is never too late to enter a trend and you will have money left to try it again if you have the worst luck and toptick the market.. Just remember the Tiger Woods story above.
3. We all know airlines suck balls as investments for common shareholders. If you want to brag about the great up runs they occasionally have and the profits you can reap, go piss in a polluted lake. Sometimes you just need to cross shit off your lists to uncomplicated things so do that with Airlines.
4. Satellite Radio…hello? Package the stock with GM and Ford and sell an ETF called ‘ZERO’
5. Salesforce.com, Amazon and RIMM – I don’t remember the last big story about Salesforce.com as it closes at another all-time high. All I read about with RIMM is how their margins will be squashed in short order. As Amazon has held the storm in the 80’s while retailers implode on their stock buybacks and debt and the consumer is tapped, I want to scream at the yutz’s writing negative pieces regarding valuation and imminent Google crushings. You should look at the lack of articles and/or negative noise with glee. Momentum is trumping valuation.
6. Ninetendo – If I walked the streets of Toronto for 2 weeks and asked people the stock symbol of Nintendo, they would say ‘AssHoser says what’. The same people would recite 10 oil companies in the Yukon that have raised 50 million to buy equipment to go drilling. I use this example not as the sign of an oil top, because I have not actually asked poepl on the streets, just a sneaking suspicion :) .
7. Last, but not least is Yahoo…what a big freaking mashup of Putz Soup. The momentum in this case is negative and accelerating. Management of this company since 2003 or so should be giving back any and all of their option profits or bonuses and a special hall of Internet Shame should be set up with Yahoo as a first time ballot honoree.
Yahoo’s implosion is the most shameless, wreckless and avoidable of the negative momentum names. While smart people and dumb alike try to call a bottom, the brain exodus underway will only increase the speed of it’s short-term demise. It will take some serious surgery and recovery time to fix…save another bid.
I would not be so bothered about Yahoo if the investment world was not so focused on it. That’s good for eyeballs and clicks, bad for small investors looking to profit. If Yahoo catches a bid it’s no different than Tiger breaking his leg. An outlier event not worth speculating.