Too many stocks, too little money. Age old problem, and here I was trying to scry an answer.
8 weeks ago, the market was dipping low, and an opportune moment to reinvest large chunks of cash. Here were the decisions keeping me up at night:
1. Activision. You know them as the makers of Guitar Hero and Call of Duty 4. They are merging with Blizzard. You know them as the makers of World of Warcraft and Starcraft.
2. Take Two Interactive. You know them as Grand Theft Auto IV. Electronic Arts (famous for SimCity, The Sims and all those sport games) were offering to buy them.
3. AMP Chinese stock fund. This makes sense, the Chinese Yuan will appreciate for the next few decades, but so will the
mining Aussie dollar. The Chinese stock market is set to grow.
4. Challenger. I've spoken about these guys before. They run a tight ship, and buying in would mean a 'P/B' ratio of 1. That means for every dollar you invest, you're actually getting ONE dollar of the underlying 'net assets.' A simplistic view is if they go bankrupt today, they will sell all their assets, pay off all their debts, and hopefully you'll get about what you paid back.
This is rare in finance companies. My expectation is that although their mortgage division will stifle, in a recession people will consume less, but save more. This means low interest rates, high inflation and increased use of financial planners and managed funds. Which is right up Challenger's alley.
They aren't wall street heroes either, they are extremely cost conscious and you won't be seeing their staff flying around in hired Bentleys or private jets. I like that. You know those corporate executives with private jets? They aren't looking after their shareholders.
The decision I made in the end wasn't that hard.
I liked Activision, they had heart. EA didn't have heart, and Grand Theft Auto, while I would play it, doesn't seem to be the most tasteful game in the world. EA's slogan is 'it's in the game.' I think Activision and Blizzard have the same motto:
Oh by the way, Activision announced they doubled last years revenue to $2.9 billion dollars. This is a company valued at $8 billion. Just WOW.
epilogue - I just checked the opening price of ATVI (Activision) it's now pushing over $30. At this rate I can kick up my feet for another month. I haven't closed out my position yet, as I believe this stock has further to go (no I'm not giving advice, and nor should you construe it as such, this is ALL opinion!)
Flickr cred: TeeRish