Barron’s ran their annual list of stocks that the manager’s they surveyed ranked by levels of respect.
Who would say they didn’t have respect for a stock they owned in their portfolio? “Yeah, AAPL is our largest position, but we don’t have any respect for them anymore. For some reason, we just can’t seem to say goodbye.” And how many readers wasted their time this weekend making deposits into their self-esteem accounts by looking up all their stocks on the list to see which ones made it? How banal. Barron’s has become too flaccid.
It would be more entertaining if Barron’s mixed it up a little (which is the polite way to say “grew some balls”) went back a decade and showed where Enron ranked, and then named all the people and firms by name who voted with “utmost respect.” This article has no investment value and it’s not even entertaining. What a person thinks about a publicly traded firm means nothing without a solid risk management plan attached.
These aren’t women. Fall in love with a stock or a brand and you’ll vaporize more of your cash faster than any ponzi schemer could. And if you are madly in love with AAPL, for example, you should own put options until Steve Jobs is back in the the saddle. Otherwise, you are gambling.
But diagnosing AAPL is easy, let’s look at Cisco’s chart over 2010:
And here it is over the last decade:
If you’re not trading this stock, what’s the point? Who cares about respect. It’s about capital gains. Unless you’ve traded in and out of CSCO for the last decade, it’s been dead money. CSCO has been on lists for “great CEO”, “Best Company to work for”, ” and it’s still called the “backbone of the internet.” Use their products, but don’t own the stock unless you’re going to trade it. The opportunity cost for having owned CSCO has been huge.
Ed, Rich, and Vito of Barron’s would do a lot more service for the community if showed the managers’ fallibility over the years and how you can’t trust human judgment and fundamental theory. Otherwise, they perpetuate the falsehood about fundamental value. Forget the Balance Sheet people, the market puts the value on the firm.
Here is Barron’s Most Respected Companies.