I wouldn’t normally do this, but so many of you keep asking that I’ve decided to share my top stock pick for 1997.
My favorite by far is Sports Indoor Centers for Youth, a little-known company based in New Hampshire that trades on the Nasdaq stock market under the symbol SICY.
The company, which went public last fall, owns and operates more than a dozen indoor sports centers throughout the Northeast. Revenues and profits have exploded, as these fields are in heavy demand all year long for anything from indoor baseball–a youth sport played six to a side that’s caught on big in cold-weather cities–to ice skating and hockey.
Now, word has it that South Florida billionaire H. Wayne Huizenga has his eyes on SICY for his expansionist Florida Panthers Holdings. Huizenga could even turn the sports fields into used-car lots for his Republic Industries car businesses.
By now, I hope, you’ve figured out that I made this whole thing up. SICY really stands for Sorry I Conned You. But my answer makes as much sense as the context in which the question about stock picks is often asked.
I was reminded of this twice in the past few days. The first time was during an on-line chat on personal finance in which some of you kept asking for my top stock pick and what I thought of this stock or that.
Frankly, I can’t think of anyone more ill-suited to answer that question. I always write about investing for the long term, not just one year. I always write about diversifying so our fortunes don’t depend on a single stock or even a few.
The second time I was reminded was during this month’s Florida Money Show, which followed the usual format: a smorgasbord of 135 speakers and 170 exhibitors telling us their views on the market and/or showing off their mutual funds or other financial products.
Most speakers and exhibitors want to sell something or sign you up as a client. But there is no hard sell, and free, high-quality educational materials abound.
There was David Evans, portfolio manager of Robertson Stephens MicroCap Growth Fund, explaining in detail how he goes about buying and, just as important, selling stocks in his fund. And as he went on about companies’ growth rates and price-to-earnings ratios, some people in the audience started to get a bit fidgety until the man to my right couldn’t contain himself any more and raised his hand.
“Can you name some companies you are interested in?” he pleaded, almost interrupting Evans in midsentence. That got everybody warmed up, and Evans had no choice but to rattle off a few names.
I do think the people who attend the Money Shows–typically in their mid-50s with net worth of $1 million–are a bit more sophisticated than average.
They are not going to just take what somebody says and rush to call their broker. You weren’t going to call about SICY, were you? They are going to take the time to figure out how a new stock would fit in their portfolio–or whether it fits at all.
Many of the sessions stressed not stock picks but basic themes of investing, such as the importance of asset allocation.
Alfred R. Berkeley III, president of the Nasdaq, spoke at a session in which nothing was sold except sandwiches for lunch. His pro-consumer speech stressed two basic points: Learn as much as you can about the companies in which you are considering investing and ask your broker how much commission, spread or markup he is adding to your order whenever you buy or sell.
Finally, investors at the Money Show are not likely to rush out to call their broker because information on which stocks to buy or sell is more often than not contradictory. As happens every year, some speakers favored the same stocks others told us to dump.
Walter Russell Mead, a contributing editor of Worth magazine who chaired the Wall Street Power Lunch panel, drew the heartiest laughs when he summarized the conclusion the five panelists had come to.
“Stocks are going to go up unless they go down,” he said. “You heard it here first.”
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If you’d like to learn more about Humberto Cruz’s savings tips, the new newsletter, “Winning at the Savings Game with Humberto Cruz,” is now available. Mail $19.95 to Tribune Media Services, P.O. Box 4410, Chicago, Ill. 60680-4410 or call 800-788-1225.
