What have you done for me, Lately?

The phrase “What have you done for me, lately?” is commonly referred to within the sports industry. A quarterback might have had a great start to the season, but, if he goes through a period of bad performances, suddenly people are yelling for the back-up; however, this phrase is not just limited to sports, but rather used in almost all aspects of life, especially business.

One of the most used methods in the stock market involves buying shares before great earnings are about to be announced, and then selling them after the rise. Yet when the next earning period comes around nobody wants to come anywhere near the stock. All this usually results in the sinking of a stock price. A great example of this is Coldwater Creek Inc. [[CWTR]]. A couple months ago everybody was jumping on their bandwagon because they were having such a great quarter, and the stock price jumped to about $26. As time went on, the stock price started to dip because CWTR, basically, wasn’t doing anything for them anymore. Now the price stand at about $10 and no one wants to get near them.

When it comes to money people are obviously going to try and put themselves in the best possible position, but sometimes people jump to conclusions too fast and eventually investors just start going through the motions. For example, before earnings a company might forecast breakout estimates, but, when the actual numbers come out, the company still saw growth and positive earnings but not to the standards some other analyst had estimated for them. So instead of looking at the positives people just ignore everything and sell it. Not because they don’t hate companies that have profit earnings, but because that is the norm. Investors know how the market will react, so they just give in. A stock that you could look at is Intel [[INTC]]. Back in July 07, many people were again jumping on the bandwagon because again analysts were reporting great earnings, and INTC didn’t disappoint. Everything was inline with what had been forecasted except the company’s gross margin was 46.9%, below the target of 48% and the price of the chip had become a little shaky. Although the numbers were positive people knew that the 2% difference were going to scare people, so they sold it. Granted the stock eventually worked its way back up. Maybe things would of been different if people had stayed with it.

Most investors always have a list of stocks that they will stay away from because it had done good for them, they tried to ride the success, but then the company “turned their back on them.” One stock on my list is Starbuck’s [[SBUX]]. I had bought shares at around $30. From there the price had a nice gain up to $40, and people were calling this the next breakout stock. Now maybe I should of not been greedy and took my profit and ran, but this company felt like it was the real deal, and I believed the price was going even higher, but then something happened and the price gradually began to decline until eventually all my profit from SBUX was basically lost. Now people who may have not really ever traded stocks might ask “Why didn’t you just sell it earlier?” On occasion an investor will come upon a stock that they are dead certain it will go up, so they will just keep watching it until suddenly the price is below where they bought it, and that is usually when the stock gets put on the black list.

At one point I had made a huge profit off SBUX, but, after bad performances, the stock turned on me and made its way onto my “DON’T BUY” list. I tuned out that big gain the stock had for me, and I fell into the “What have you done for me, lately?” syndrome. And that’s when it hit me. If you try to be greedy and try to gain every cent from a stock. The stock itself is going to ask you, “What have you done for me, lately?”