Stock Market Experiment: Invest based on the products you use

by phil on Tuesday Aug 19, 2008 4:11 PM

My understanding of the stock market is that it's an information war. Whoever has the better information wins. So when it comes to personal investing, you have to look at how special your knowledge is. If you believe, for example as I do, in your abilities as a critical, yet mainstream, consumer, then why not pick stocks according to what you use on a day-to-day basis.

So today, I'm going to take a snapshot of the products I use, mention the stocks, and 6 months from now, re-visit to see how they performed. This is based on the theory of product holistic integrity: that if their products stink, so will the company.

AMZN - Amazon
EBAY - eBay
GOOG - Google
MSFT - Windows XP (I still use it, it must have some value)
AAPL - iPhone, MacBook Pro
WPO - Washington Post Company, I use Slate.com daily
NWS - News Corp, I read FOXNews everyday, I use Myspace everyday, I use rotten tomatoes (IGN)
WFMI - Whole Foods, I eat there everyday
COST - Costco, still shop there
JBX - Jack-in-the-box, I still eat there
TM - Toyota Motor Company, gotta love my Scion tC
SWF - Still buy their generic brand goods
DELL - My computer's still running strong
URBN - Urban Outfitters, love their clothing
CL - Colgate-Palmolive, love their toothpaste
PG - Love my Gillette razors
T - AT&T, I don't love the company, but they're with the iPhone, so they can't be that bad.

Comments

zack burt said on August 19, 2008 10:09 PM:

I would criticize and say that you really aren't predicting any stock plunges. Then again, this is Philosophistry.com not Philosophy.com.

And you own a Scion

Philip Dhingra said on August 20, 2008 12:16 AM:

I think I am. Because the products start to suck before the stock price starts to dip. A company can still maintain their market share for a while by inertia, but the adept consumers, like myself, will have moved on by the time the rest of their customer base figures it out.

zack burt said on August 20, 2008 1:30 AM:

"remember personal info?" is broken btw

then I think you should be a bit more explicit. do you think all these stock prices will rise? what distinguishes the products that will fall?

ebay -- stock will go UP
msft -- stock will go DOWN

because the "i still/i love/nothing" distinction is a little ambiguous yo.

Philip Dhingra said on August 20, 2008 1:34 AM:

Well, if we're just talking MSFT, my intuition says it'll go down. But, on the other hand, if we're raising this theory to a the level of being a rule, then I'd have to ask, "If I'm still using their products, they must still be a good and solid company" in which case, MSFT will go up.

According to this theory, all of these stocks are more likely to go up. The reality is, as a whole, this rule will produce a portfolio that will rise.

zack burt said on August 20, 2008 4:19 PM:

ok. so are you predicting that they will be higher, in proportion to indices of the stock exchanges they are on? i think that if you predicted some company downfalls as well (based on shoddy products), this post would be a lot more interesting in the next 6 months.