The following article is part of The Motley Fool's "Stock Madness 2006," based loosely on the annual NCAA College Basketball Tournament, a.k.a. March Madness. Throughout the competition, our writers and analysts will engage in head-to-head competition. You, dear readers, are the fans and referees -- after you read these exciting duels, your votes will determine who moves on to the next round of play. The writer who survives the tournament will be our champion and most valuable "coach."
But, please, make no mistake -- "Stock Madness 2006" is a GAME!
Sorry, but I have to say I think Shruti's team's got some long shots. First, I have to pick on her star player, Google (NASDAQ:GOOG). Don't get me wrong. There are lots of things I like about Google. It's top-drawer in search, after all. Plus, its mission, "Don't be evil," shows a good deal of savvy about a new, more enlightened era of corporate attitude.
However, I do have my concerns. First off, Google has already intimated that growth is going to slow unless it finds new revenue sources -- that's not rocket science. Meanwhile, its apparent plans to get into just about everything -- many argue, your personal business -- may not bode well over the long run. Although I myself lauded Google for fighting the government's demands for search data, an unpleasant aside was that Google stores up customer data in the first place. At what point will users find that too creepy?
There are plenty of Internet giants -- including my team player, veteran Yahoo! (NASDAQ:YHOO) -- that want a piece of the action. I can see how Yahoo! investors might benefit from the market's love affair with Google, as Yahoo! has been working diligently to shore up its competitive advantage, while it hasn't enjoyed the same kind of wild euphoria over its shares.
As for Shruti's other players, I can't help wondering whether they're fit to back up Google, and I see some weak spots in the strongest players. News Corp. (NYSE:NWS)? Rupert Murdoch seems to have only just recently fully comprehended the disruptive changes to media that the Internet currently represents, and one of its savviest acquisitions, MySpace, is currently in a media frenzy over the safety of children on the site. Martha Stewart Omnimedia? Its leader has become a bit of a caricature, given jail time and a recent spat with Donald Trump. So far, the company only seems to be rewarding insiders, according to Fool Seth Jayson.
As I said before, my team is keying in to important consumer trends, and there's no controversy dogging my players. There's Yahoo!, Toyota Motors (NYSE:TM), Urban Outfitters (NASDAQ:URBN), Coldwater Creek (NASDAQ:CWTR), and Rare Hospitality (NASDAQ:RARE). There's good reason to argue that all five have impressive growth ahead, while many of Shruti's players have some questions as to their competitive positioning at the moment. We're looking at the future. Why take a chance on the long shots?
Shruti Basavaraj's rebuttal
While Alyce describes her team as able to "key into important consumer trends," I would argue that the ability she speaks of is vulnerable to economic downturns and a change in consumer tastes. Especially since her retail stocks and restaurateur are all extremely sensitive to fickle swings. What growth prospects do her five stocks actually have? She doesn't ever really come out and explain.
So whatever these nebulous growth prospects may be, I doubt they're as promising as mine. Alyce spends a lot of time dogging Google, but you can't argue with returns. And Google has added a heftier return to my portfolio than any of her stocks could have, especially Google's rival Yahoo! I would recommend that Alyce take a dose of my portfolio for a chance at those market-beating returns.
Can Alyce avoid the long shots and take down Shruti's "fun" portfolio? It's in your hands. Check out Shruti's team, and then cast your vote.
Alyce Lomax owns shares of Urban Outfitters but of none of the other companies mentioned. Fool analyst Shruti Basavaraj owns shares of Spectranetics and Elizabeth Arden. You'll love the Motley Fool's disclosure policy.
