How did I miss Hershey??

by gbsmith4

I may have written about this before, and if so, forgive me.  But I was reminded the other day of a) how simple investing can be and b) how stupid I can be.

As for the investing part, I have a rule that I would estimate, works about 99% of the time.  And the rule is really simple: as soon as I start using a product or service (that I pay for), I should immediately buy the stock.  In fact, I bet the same applies to you.  Think back about the first time you used Netflix.  Or Googled something.  Or bought an Ipod.  Right: if you had bought NFLX, GOOG, or AAPL the very next day, you’d be swimming in money.

Now, I know this style doesn’t adhere to rigorous fundamental analysis, and surely not technical analysis…but it works.  And it seems to work on even the doggiest of stocks if you adhere to one other rule: as soon as you stop regularly using the product or service, you must immediately SELL the stock.

Case in point: I frequent Rite-Aid (RAD) frequently for the simple reason that it’s in the same area as the Safeway (SWY) we visit.  So, I own RAD stock.  But, if I ever stop going there and decide the Walgreen’s across the street is better, I’ll sell RAD and buy WAG.

In fact, I’m such a believer in this strategy, that I regularly do a mental scan to see if we’ve started using any new products that are made by companies listed on a U.S. exchange.  For example, we recently bought some new Head tennis racquets.  Love ’em, but the stock is listed on the Vienna exchange.  So, a no-go there.

Anyway, on a kitchen counter, we always have some snack stuff I can nibble on during the day, primarily pre and post cycling or tennis.  One of those jars used to contain some organic chocolate squares we’d buy from the local crunchy-food store, but we figured simple Reese’s peanut butter cups would have the same effect, and they’re a lot cheaper. I’ve been having about 2 or 3 a day since March.

Then, a few days ago, I hear on the news the Hershey company is killing it in revenue and profit.  A light goes off: “Wait, I’ve been eating Reese’s for a few months.  Are they made by Hershey??”  A quick Google search reveals the awful truth: they are, and I missed the big move.



Ugh.  That one was tough to take because once again, my personal usage pointed out a great stock.

On the other hand, it’s nice to know my strategy worked again.  Just wish I had the discipline to follow it!