Kick the tires

Commentary January 26, 2011 at 07:00 PM
Share & Print

Peter Lynch, one of the best stock pickers in the biz and the fellow who was, for years, at the helm of Fidelity's Magellan fund, had the big idea of walking around the mall to check out the stores — what stores attracted customers? As I recall, he and his kids made a game of it. If you want to play the shorting game, you might also be interested in what stores don't attract customers.

A few years ago, you could have compared the number of shoppers at Linens 'n Things to those at Bed, Bath & Beyond. The latter would have clearly won your investment dollars.

I've written about Apple. When I need advice about my iPhone or iPad, I've found that visiting the Apple store around 6 p.m., or just before, on Saturday night has almost no wait times. Mind you, there are still around 40 to 50 customers milling around the store. However, there are enough employees so that I usually don't wait for more than a few minutes. The Apple store would probably have thrilled Lynch when he was at Magellan; I'll bet he would have had a truckload of the stock.

So if you hate shopping, the next time your spouse goes out into the world of commerce, you might just tag along anyway and do a bit of head counting at mall stores, fast-food joints and wherever else.

Since more stock picking today is overseas, it's harder to kick the tires of some companies. However, a little research can take you to Asia. For example, here's a link to a Time article about the 10 best-selling automobiles there: www.time.com/time/photogallery/0,29307,1909818,00.html.

Buick is No. 1, and Hyundai is a best seller, too. The fourth car on the list is made by BYD, a company that is about 9.99% owned by Berkshire Hathaway, and Berkshire B-stock was in the low 80s the other day. (Hyundai, by the way, has been selling robustly in the United States, too, and is a success story — if it meets your value and return targets, it could be a good international play.)

Happy hunting!

Speaking of happy, try to focus on being in that state for the entire week. If you like the feeling, extend it forward.

Check out more blog entries from Richard Hoe.

NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

Related Stories

Resource Center