A Sign Of The Stock Market Bottom!?!
The Dynamic Wealth Report
March 13, 2009
What You Can Learn About Investing From The FoodTV Network
I have a dirty little secret. I love to watch TV. Not just any
TV however. My passions are split three ways… first is the financial
networks (Would it be anything else?). Second is sports, especially pro
football (Go Chicago Bears!). Third and finally is the FoodTV Network.
I’ll admit I have a passion for cooking… and of course eating. But
that’s another story.
When I get home from work, one of the ways I unwind is by watching
cooking shows. I don’t know why, but I enjoy watching people work away
in the kitchen. I’m always curious to see what they’re making. And of
course, I like to think about how I’d make it even better. (Did I
mention I love to cook?)
Linda and I often watch some of these shows together. Often we plot out
our weekend cooking adventures by mixing and matching different dishes
from different shows. It wasn’t till a few weeks ago I realized how much
these cooking shows were influencing other parts of my life.
And that’s when I learned something important about the stock market
while watching FoodTV. But more on that in a second..
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Let me give you an example of how cooking shows are starting to
impact other areas of my life.
FoodTV is famous for having timely programming. Think about it. When
Valentine’s Day is approaching the shows are about romance, intimate
dinners for two, and of course chocolate.
In November they show more than a week’s worth of episodes about
Thanksgiving Dinner. They’ll discuss everything from how to cook the
perfect turkey to 10 different pumpkin pie recipes. During the holidays,
you guessed it… Christmas cookies.
They even do a special show for the Super Bowl on food to make for the
big game!
If there’s a big event happening, the FoodTV network has it covered.
So, what did I learn by watching cooking shows?
I learned right now economic times are tough.
Earth shattering isn’t it? Ok, now before you start throwing canned
tomatoes at me, hear me out. See, the other day I was watching the chefs
cook some amazing dishes. That’s when I started noticing a change. They
weren’t talking just about ingredients and techniques.
They were highlighting how inexpensive a particular ingredient was. They
offered up substitutions to help cut costs. They talked about buying
groceries on sale as a way to “feed a family of four” for just a few
dollars. They talked about how a particular recipe helps stretch your
budget.
It was surreal. It was a big shift from the days of truffle oil, prime
rib, and goose liver pate.
Over the span of a few hours (Yes, I watch the FoodTV Network for hours
on end) every show had at least one comment like that, if not more.
Clearly these shows are focused on cooking in a recession! Just like the
Super Bowl specials, these shows had a cohesive theme… and the theme was
saving money.
Ok, now to the point.
This little anecdote illustrates just how long and deep this economic
recession has become. Really, how often do you see economic events
influencing FoodTV? And, that makes me wonder if the recession’s getting
overdone?
A few years back, many famous investors talked about the magazine cover
indicator. They joked that when a majority of magazine covers proclaimed
the stock market dead, it was a sure sign we were at the bottom. Eventually the market would rally. They noticed the same thing with the
real estate market, and gold…
By looking at magazine covers and doing the exact opposite it was
surmised, an investor could make tons of money.
Was it true? Did it work?
I really don’t know, but it seemed to me to have some validity. So apply
this logic to FoodTV. Might they be a contrary indicator of how the
market’s going to perform? Might all this recent “How-to-save-money”
programming be the modern day magazine cover indicator? Might this be a
signal the recession is about to end and we’re at the bottom of a
market?
Right now, I’m a believer.
I think once famous TV chefs start worrying about food costs, it’s a
sure sign we’re near the bottom. Let’s hope FoodTV is right and sunny
days are ahead. I don’t know about you, but I’m going to watch more of FoodTV… maybe they’ll start predicting the outcome of football games
too.
• Merck (MRK) was upgraded by Bernstein from a
“Market Perform” to an "Outperform". I like this call. Lots of M&A
activity in the pharmaceutical industry, and that drives everyone’s
value higher.
• Genentech (DNA) was downgraded by almost everyone
this week. The company signed an agreement to be acquired by Roche for
$95 a share. The stock right now trades at $93.
• Stifel Nicolaus recently initiated coverage on Papa Johns
(PZZA) with a “Hold” rating. Pizza is a surprisingly inexpensive food. I
think their business might do better than expected.
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