Some Stocks Only Their Mother Could Love
Here are some stocks I don’t own and would never consider buying unless I stepped through some portal where black is white and down is up. I don’t care about their financial statements or technical indicators for the same reason that I don’t care if the aft end of the Titanic lurched up out of the water or not before the ship finally sunk. Here’s why I think these companies are headed for the bottom of the sea:
Garmin (NASDAQ: GRMN): they make GPS navigation devices. Navigation is a function, not a device, which means that until Garmin starts making units that can surf the web, make phone calls, take photos and outsell iPhones, I won’t own their stock.
Nuance Communications (NASDAQ: NUAN): makers of ‘Dragon Naturally Speaking’ software. Google’s ability to transcribe spoken words is improving dramatically, as is their ability to translate between languages. For decades linguistics Ph.D.s have been trying to make software that will (1) wreck a nice beach and (2) translate it to other languages. Google found that by surfing every page on the web (including UN documents and others that are in multiple languages), you solve problem #2. Give away Google Voice and GOOG-411 and other similar services and you solve problem #1. Unless Nuance and has a way to sell $25 Billion in advertising space every year, they’re outgunned.
GameStop, Inc. (NYSE: GME): These people retail information on plastic disks via brick-and-mortar stores. ‘Nuff said.
Barnes and Noble (NYSE: BKS): These people retail information on dead trees via brick-and-mortar stores. ‘Nuff said. (UPDATE, Wednesday, August 4, 2010: I published this blog post on Monday, August 2. Some top executive at Barnes and Noble must have read my astute analysis because on Tuesday, August 3, Barnes and Noble announced that they are seeking a buyer for their company.)
Crocs, Inc. (NASDAQ: CROX): This company is based on a fad which has run its course. As far as I can see it, the most likely course for their company is that their stock price will dwindle until some larger company buys them. If you buy their stock the day before that announcement comes, you’ll make some money.
Eastman-Kodak (NYSE:EK): Google Finance says that they have 20,000 employees. For the life of me I cannot figure out what that many people do all day at a photographic film company that no longer makes photographic film. I just can’t.
Note: I am not a financial advisor and have no formal training nor professional experience with stock investing. I’m just writing this article to explain my reasoning for not owning some particular stocks. It would be foolish for you to buy or sell any stocks based solely on what I have written here.