Ticker symbols are more important than you think. Getting even a single letter wrong in these tricky three- or four-letter devils could lead you to buy a stock you don't actually want.
It's certainly easy to guess wrong. Who'd expect Apple's (NASDAQ:AAPL) ticker to be anything other than APPL? Type in CISC for Cisco (NASDAQ:CSCO), and you'll end up with a penny stock, Continental Info Systems. And don't expect Coca-Cola's (NYSE:KO) ticker to begin with a C. Buy shares of CO, and you'll soon be invested in China Cord Blood -- not exactly "the pause that refreshes." The ticker COKE, meanwhile, gets you one of Coca-Cola's bottling operations, rather than the whole company.
If you're a fan of Graco-branded children's products, you might be interested in buying its stock. But the children's product maker is a unit of Newell Rubbermaid (NYSE:NWL). An unrelated company also called Graco, with the ticker symbol GGG, is an industrial operation focused on fluid-handling systems, which admittedly might have some applications for tots still in diapers.
If you use the wrong ticker symbol when placing a brokerage order, even if you catch your mistake soon, you may still end up having to pay. You'll incur trading commissions to sell the holding, above and beyond what you paid to buy it. If your brokerage charges $10 per trade, as mine does, you'll be out $20 needlessly. And if you don't notice the error for a few weeks or months, you might miss out on gains delivered by the company you meant to invest in -- or suffer losses from a stock you never meant to own.
Cocktail-party-worthy ticker talk
Now that we have the important ticker information out of the way, here's some amusement to go with it. Some of our favorite Foolish examples of witty tickers include:
- Explosives company Dynamic Materials (NASDAQ:BOOM)
- Southwest Airlines (NYSE:LUV)
- The Asia Tigers Fund (GRR);
- Theme park company Cedar Fair (FUN)
The PowerShares Dynamic Food and Beverage exchange-traded fund (ETF) has PBJ as its ticker symbol, while the Claymore/MAC Global Solar Energy ETF sports the ticker TAN. If only energy concern Denbury Resources (NYSE:DNR) had put as much thought into its ticker. (Let's hope it's never sent to the stock market emergency room...)
Fun tickers aren't just good for a laugh; they might also juice your returns. Researchers at Pomona College found that on average, companies with clever ticker symbols outperformed the market significantly between 1984 and 2004. Remember, if an amusing ticker makes you smile, so could its company's returns.
Feel free to share your favorite stock ticker symbol in the space below.
