Ridiculous Randy Index (TAP, CMG, CROX, POT)
Randy Marsh, the All-American Dad who flys off the handle, rides fads to the extreme and is as gullible as his son's friend Butters. If Randy had to pick a portfolio based on his limited worldly knowledge what would he pick?
Imagine a broker sitting across from Randy explaining to him how equities work, in which Randy would burst out with:
"Ok, but I really like burritos, can I invest in burritos?" The broker would give him a list of companies that fit the bill but Marsh would go with the one that has the highest P/E. Despite the broker explaining to him a high P/E is very risky, Marsh would not understand and believe in his idea - the higher the better. Thus our first selection of the $413 per share insane price of Chipotle Mexican Grill (CMG) with a staggering 62.4 P/E.
Naturally, Randy loves burritos but they taste even better when he is high. He finds that a stock trades with the ticker 'POT'. He buys without further question, the second stock is Potash Corp (POT).
For the 3rd pick, we turn to Randy's disease - Alchoholism:
|Randy:||No, Stan, you don't understand. I have a disease. Daddy's very sick.|
|Stan:||What?? Did you go to your AA meeting?!|
|Randy:||Yes, they're the ones that told me. I thought I could just quite drinking on my own, but... it's an illness, son. I have to admit that I'm powerless to this terrible disease. [coughs, drinks, and burps.]|
|Stan:||Dad, you've had enough! Just stop now!|
|Randy:||I can't! I'm sick! [begins to cry and walks off in his blanket. He goes to the bathroom and closes the door, then goes to the vanity and looks in the mirror] It's not fair! Why did you give me this disease?! [coughs as he cries, then takes some shears to his hair and shaves it off. Stan is about to pour milk into a glass downstairs] Stan! Stan! [Stan stops and sets the carton of milk down, then walks into the living room, where Randy is now seated in a wheelchair.] Stan.|
|Randy:||Stan I... need your help.|
|Stan:||Dad, what are you doing in Grandpa's extra wheelchair?!|
|Randy:||Gotta try to take it easy from now on, son. Get Daddy another beer, will ya?|
|Stan:||No! You don't need another beer!|
It's obvious that Randy would take his love for beer to the next level by investing in Molson Coors Brewing Company(TAP). And hey, they even pay out a nice 3% yield from selling their crappy watered down beers such as Coors and Molson Ice.
However, Randy is getting low on cash and has to think of a cheaper stock, one that doesn't cost $400 like CMG. He asks himself "What else do people like"?
"Now hold on, Stan and his dumb friends love those ugly plastic shoes. Come to think of it, most soccer and fat bottom mom's love them too. Crocs!!!!!!!!"
You bet, once again ignoring any concept of 'momentum stocks' Marsh goes nuts for Crocs Inc (CROX). Luckily CROX is only $20 a share and he could care less about the fundamentals.
MASTERY Bottom line:
Fellow Masters, the novice American investor doesn't want to miss out on this bullish run in equities, thus sometimes you have to think like them. Randy Marsh, just like every other stock chaser, would buy what's hot and a few others that "don't compute" (i.e. buying stocks based on ticker symbols).
We present to you the Ridiculous Randy Index consisting of TAP, POT, CMG, and CROX. Could these stocks run higher? Most definitely. We believe they will thanks to the Powers-that-be and the Randy Marsh investors of the world.
REDICULOUS RANDY INDEX
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