Creative Investors Judge the "Personality" of a Stock

It's always dangerous to impute human motivations to inanimate objects and to statistical artifacts.

Things aren’t people.

For instance there are vital differences between a rock and The Rock, the wrestler turned actor. (Okay, maybe not THAT many differences!)

But we know that a stock is not a person.

Still, it can pay off for investors to view it from the perspective that it is alive, that it is dynamic, moody, wishful, and alternatively optimistic, and pessimistic, just as we are.

It can be robust and healthy, or concern you because it catches frequent colds and misses too much work.

Sometimes, like a teenager or a femme fatale, a stock will misbehave for the heck of it, simply because it is getting bored by being too steady, too predictable.

Take Altria, one of my favorite plays over the past few years.

This equity has done very well, steadily disgorging dividends. Despite being dogged by regulators and lawyers and the courts this amalgam of Phillip Morris and its Marlboro brand of cigarettes, and Kraft, the food giant, is consistently profitable.

But if we look at it as if it were a person, who would it be, a strapping teenager outgrowing its britches, or a somber and steady elder statesman, ramrod straight, but definitely on its way to the next life, and the only question is, “How soon?”

It’s the latter, in my estimation. Rapid growth isn’t in the cards for Altria, unlike the next soaring technology stock. Tepid growth is more like it.

Altria, as we know it, is seriously weakened by threats to its domestic tobacco unit.

It’s just a matter of time, some believe, before the regulatory environment and cigarette quitters make the manufacturing and distribution of cigarettes in the United States unprofitable.

But before that happens, like a good grandpa who still has his mental faculties, Altria will march forward proudly, but also split off regiments of “survivors” in various directions.

Plans are underway to spin-off Kraft and to split Phillip Morris into two units, international and domestic.

Grandpa’s wealth will go on, after he, the domestic Phillip Morris, is securely entombed in the family crypt.

So, what type of play will this be?

It looks be a steady performer, and range bound. So, if you’re seeking a few dollars here and there by trading in and out of it, it might pay off nicely for you.

But expect it to stray a bit along the way, as it did last week, losing about 5% of its value after a New York court enabled a new type of class action lawsuit to proceed against Phillip Morris.

You could get “stuck with quality” as I put it, if it takes a month or two to regain its composure after throwing a coughing fit.

But it should recover nicely, given its prospects for a diversified future.

This is one grand patriarch who is poised to survive death.

Best-selling author of 12 books and more than 850 articles, Dr. Gary S. Goodman is considered "The Gold Standard"--the foremost expert in sales development, customer service, and telephone effectiveness. Top-rated as a speaker, seminar leader, and consultant, his clients extend across the globe and the organizational spectrum, from the Fortune 1000 to small businesses. He can be reached at: gary@customersatisfaction.com.

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