This is a chart of Garmin (GRMN) for the last six months.This makes for a good talking point after the recent post on Johnson & Johnson, client holding.
The stock is down more than 50% coming in to the day and then down a bunch today on what appears to be news about a competitor.
Garmin obviously makes gadgets, not to minimize the utility at all, but a gadget maker is one type of stock that can have a great run for some period of time (could be many years) and then run ends for reasons that are easy to see and understand or for no apparent reason at all.
This does not make it a bad area to invest in but it does make it different than, say, a phone company that you pay your bill to for decades or a company that you have been buying cookies from since you were ten.
I don't follow Garmin very closely (I wrote positively about it for WallStrip in Nov 2006 but can't find it on their site) these days but something must have changed (I see a downgrade or two and maybe there was bad guidance too?). Another issue, and I think this is important, the climate for stocks has generally not been good since the stock peaked.
Clearly a double digit decline in the broad market cannot account for why a stock would more than cut in half but it does create an environment where any bad news is likely to be punished more than normal.
4 comments:
I realize this is not relavent to the current topic, but what are your thoughts on a 'GLOBAL MARKET INDEX PORTFOLIO' the article can be found at http://www.capitalspectator.com/
as the article says it relies on the basics of MPT. While I am not a hardcore MPT guy I obviously buy into quite a bit of of it.
The GMP beat SPX because it is much closer to being properly diversified than just buying SPY.
I doubt it is perfect because nothing is but it covers almost all the bases but unless i missed it i did not see how it was allocated percentage-wise.
Anyone so inclined can capture all the asset classes but it relies mostly on broad based products which do have drawbacks.
Re: Garmin
Maps are cheaper.
Perhaps it is lost.
T
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