Tonight's All-Star Game is a celebration of this year's Major League Baseball stars. It's also the perfect time to brush up on how the classic American sport can improve your chances as an investor.
It's a game rich with the kind of slang and strategic posturing that plays perfectly into the marketplace. Perhaps that's why one of the favorite books of many CEOs is a baseball book, Michael Lewis' inspiring and insightfulMoneyball.
So if you've got the time to muster a seventh-inning stretch, you may want to check out how something as simple as hitting one out of the park has inspired some of our more popular articles like:
- Tom Gardner's never-ending quest for the next "Home Run Stock" to buy.
- Rex Moore's multibagger experience with Audible.
- Carrie Crockett's perspective on the psychology of long-ball investing.
More than metaphors
Baseball is everywhere in Corporate America. Just consider something as simple as a quarterly earnings report. A company "steps up to the plate" to announce its financial results. If it misses, it strikes out. If it connects, it scores.
Too much? I would argue that we don't lean on baseball enough to pepper up our fiscal jargon. The next time a company reveals that it is bumping its earnings release date until its bean counters can sign off on the numbers, let's just call it a rain delay. When a company makes cuts to improve its overhead, let's say that it's choking up on the bat. When your ex-CEO passes away awaiting hard jail time for fraud, let's tag that as a double steal.
We don't need to stop there. When a company cuts corners or stuffs the sales channels just before a quarter ends to meet profit targets, let's call it a squeeze play. If your CEO loves to wear too many hats -- think Apple Computer's
Maybe I'm stretching the ground rules with the Cracker Jack suggestion, but if it's in the lyrics of Take Me Out to the Ballgame, then I consider it fair game, or fair ball, or anything short of foul.
Swing, batter, swing
The Home Run Derby is a powerful component of baseball's All-Star break. No matter how you feel about Barry Bonds and steroid allegations, just the sheer power involved in elevating a ball over a fence that stands 300 to 400 feet away is a pretty sight to see.
Some investors are that way, too. Around here, that aggressive investing style can be tied to our Rule Breakers newsletter service. I'm one of the analysts on that team, and we always seem to be swinging for the fences.
It's worked out well so far. We're trouncing the market. Four of the 24 stocks that were recommended last year have more than doubled. That includes companies like Akamai
Yes, aiming for the fences is risky, but when your portfolio lands a stock that has tripled, it grants you the luxury of completely striking out on two other whiffers (ummm, two other stocks that you took a chance on that tanked) and still come out ahead.
That's right. Even Rule Breakers sometimes have to walk back to the dugout rejected and dejected. We suffered through markdowns, ironically enough, at closeout retailer Overstock.com
That's all part of the game. Investing is like that. There is a fine line between the abysmal Mendoza line -- a batting average of .200 -- and an All-Star-caliber performance of someone who is batting .300. Think about that for a bit. If you get two hits in every 10 at-bats, you're begging to be sent down to the minors. If you land a hit three times instead, just one more, you are the toast of the town and dressing out for tonight's ballgame.
That's how it is in this classic sport and in the modern market. I love this game.
Want to take some swings with some long-ball hitters? Suit up for the game, as you can play in the big leagues for the next 30 days with a free trial subscription to Motley Fool Rule Breakers.
Intuitive Surgical, XM, and Akamai are all active Rule Breakers picks. Disney is a Motley Fool Stock Advisor selection.
Longtime Fool contributor Rick Munarriz owns shares in Disney. He is a member of the Rule Breakers analytical team, seeking out the next great growth stock early in its stage of defiance. The Motley Fool is investors writing for investors .