Wednesday, April 06, 2011

Painfully forgetting a personal investing rule

Over the years I have often followed the Peter Lynch adage of buying stocks that sell products or have a concept that you or your family really like, especially if they are not already saturating their markets. It worked this past year with Lululemon, J. Crew, Quiksilver(as a trade), and Netflix, over past years with some notable names like Apple and Costco. This year I really blew one.

In early January after that first big late December snowfall, I had to admit that my 15 year old Timberland boots had been done in by time. At the main Manhattan Timberland store on lower Broadway I bought a new pair of Timberland boots that felt good even in the store and also noticed a wide array of more upscale products that our foreign visitors were buying consistently as I anguished over what size and style of traditional boot that I would get.

After a few days of wearing the boots, my wife realized that it was time for her to replace her almost vintage LL Beans. She asked me if they were on sale, as is her wont. I responded, "No, they are not and they're worth every penny." They felt great for walking, solidly waterproof, and not bad looking on me if I may say so myself.

At the time I did take a glance at Timberland stock and it was at $27 and was up from the high teens in the summer. My thought was that it looks like others may have already noticed what I had just experienced. Today the stock is at $43, up over 50% since my purchase. I can't believe that I missed it. I saw it, experienced it, and just looked at price on the stock, was it a value, rather than the approach I took to buying the boots, not on sale, who cares, I like them.

Postscript: while the foreign buyers were a hint, what I could not have known is that Timberland products have gone viral in urban China and are as hot as Newports in Eastern Europe.


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