This morning I got some great news. I also got proof for the umpteenth time that individuals can pick stocks.
One of my stocks/companies ($RNOW) was purchased by Oracle. It’s exciting to wake up to news like this, especially when you don’t have inside information. It’s really exciting to get the news from your friends on Stocktwits as well. In the old days I had to go to Yahoo Finance and look up my tickers. For years it was a lonely, monotonous experience. I could just open my account at Schwab, but if I saw a stock up 15 percent, I would assume Schwab had a misprint and have to go check Yahoo Finance as well.
The people one would normally accuse of receiving special treatment by the companies, the ‘analysts’, were busy last week downgrading $RNOW (Stifel Nicholaus, and Barrington Research). Seems the fundamentals and price targets were getting in the way of the story. Woops. These analysts work hard for the most part I assume. They know every metric the company says they care about and a few they proudly make us themselves. They study quarterly filings and annual reports, they do channel and customer checks, they attend industry shindigs, talk to management and make elaborate projections on wonderful excel spreadsheets. I look at this whole analyst process as just a data point. It’s one small piece of data on any story stock that I own. On these Friday downgrades, I actually bought some $RNOW (it’s on the stream).
I love ‘Story’ stocks, especially stocks with stories I piece together. You can tell me a story, and I may listen, but I won’t buy your stock. Stories change and if I did not create the story, I don’t want to be chasing you down for the twists and turns that inevitably occur…usually the day after I am told the story and buy your stock.
I tell my stories as well and like to do so often, but not so much for you to buy it as for you to poke hundreds of holes in it so that I can add more context to my story.
I do listen to as many ideas as I can. From trusted sources (Certain blogs, friends, stock lists, and Stocktwits streams), ideas can lead to grand stories that I can put together on my own.
Stories allow me flexibility when owning stock. They allow me to see a very big picture. Owning stocks based on a certain data sets does not work for me. The data just makes me nervous. It makes me think small and short-term. I believe in short-term losses, but it’s price and volume of the stock alone (sometimes driven by the data) that makes me take the losses.
All stories need a starting point, and mine start from a list of stocks at major highs. For most, the story is old by this time, but for me, the story is just beginning.
This is how I approach my work on ‘Momentum Mondays’. I am looking at defined lists of stocks with an open mind, talking to as many people as possible to expand the list of ideas. Working with my friend Ivan, this week I am germinating two stories, one is Electronic Arts $ERTS (buying this morning) and the other is Netsuite $N (assembling my story as we speak).
With $ZYNGA going public here soon, Electronic Arts is interesting to many. The stock has been breaking out to multi-year highs. I like the story possibilities because of the size of the company and the many paltforms for their many amazing brands. The Company can buy or build to grow and I think in an outlier growth case could refigure retail for gaming. Odds are they won’t, but it’s a good story and one I am building on for now. Metrics be damned….
I am also adding to my position in Liveperson $LPSN the remaing story stock in the customer relationship software space now that RightNow is owned by Oracle.
There is a lot more good stuff so I hope you enjoy this episode of ‘Momentum Monday’ (click here).