Instagram and ZAGG …Sometimes It is More About the Product Than The Financials

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  • on April 12th, 2012

There is more hate in my stream for liking both $ZAGG and Instagram (long $ZAGG) than I can remember. Maybe Intuit is a close third (long $INTU).

There used to be (wait …still is) all day hate for $AAPL lovers.

When markets are good and shrugging off bad news, you can own momentum and that means I want to own the best products. The financial statements just don’t matter as much during momentum phases like we have been in. I mean even drek like $C and $BAC go up.

I was doing a fireside chat last night for Columbia Business School graduates in Del Mar. I told them the first problem of the night was that a bunch of Columbia business school graduates were assembled to hear an ASU graduate speak about how to do things. It was a joke and they laughed but it is not really a joke.

You can study momentum in books and I imagine the math professors are better at Columbia, but in the real world things play out different than in the textbooks. As Rodney Dangerfield classicly declares in Back to School:

‘Who is going to pay the Teamsters!’

Right now, great products,great packaging and fresh ideas are worth more than balance sheet and operating leverage. The patents that Hewlett Packard and Eastman Kodak stored away on the shelves for hundreds of years are worth less than today’s patents of scale built on the social graph (plain old execution and less whining). $AOL proved it in a different way just a few days ago.

If you are old school, just stand aside I guess. If you are new school and minting money, just respect it and don’t be cocky. The cycle will end and something new will captivate the large institutions that chase shiny objects that seem stupid to you.

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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