Great investors use all kinds of data to reach their conclusions.
Since I am someone who is better about talking (or blogging) about good analysis than actually doing it, I’m lucky I have a network of very clever value investors to follow.
My friend Danilo at Rational Investment Methodology hands down has the most thorough company analysis and modeling I’ve ever seen.
One of the companies he tracks is Weight Watchers. Weight Watchers is actually not just a cult but a listed company with a share price as well. Danilo is so thorough in his investigations he even went to a couple of Weight Watchers meetings. He’s a really skinny guy, so this must have raised eyebrows. But we geeks will do anything in the name of good research...
He recently showed me a graph he created of Weight Watchers which has seen a sharp increase in share price ostensibly because of Oprah’s involvement and investment in the brand. Danilo points out that the Jennifer Hudson effect, another weight loss personality, had a much larger effect on people looking at Weight Watchers.
To me the graph was striking because you can so clearly see that over the years, there is a huge spike in interest during the January New Year’s resolutions, then another blip pre-beach season. Towards the end of the year, interest tanks in the lead up to Christmas.
The clearest example I’ve seen of consumer sentiment driving a company’s fortunes. Since we’re in September and in the super dieting slump towards Christmas, I guess I can eat all the almond croissants I want….