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There are the 7 Deadly Sins in the Bible and the 7 Deadly Sins in investing. In the Bible, the 7 Deadly Sins are lust, gluttony, greed, sloth, wrath, envy and pride. In investing, they are fear, apathy, emotion, panic, immobility, depression, indecision and gambling.
And while you can still make money from some of the 7 Deadly Sins in the Bible — I’ll show you how in a moment — you will be doomed to eternal losses if you fall victim to the 7 Deadly Sins of Investing.
Just for fun, I thought I’d find a stock that loosely symbolizes each of the 7 deadly biblical sins to see how it fares against my momentum criteria. Now, I’m not saying any of these companies are bad or evil. And I don’t know whether our new climate of parsimony means the “greed is good” era of the 1980s is dead or not. What I do know is what stocks are in a position to profit today and which aren’t.
Here’s a fun look at some stocks that symbolize the 7 Deadly Sins and how I expect them to perform.
NEXT: Greed – Goldman Sachs
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Deadly Sin: Greed
Stock #1: Goldman Sachs (GS)
Gordon Gecko’s “greed is good” catch phrase in Wall Street became an anthem for an entire generation. To be sure, enthusiasm for greed is what drives the partners at Wall Street leader, Goldman Sachs (GS).
The best part of greed for GS is that there are no consequences. We learned that with the bailout of Wall Street during the
financial credit crisis. No eternal damnation here. In fact, former Treasury Secretary Paulson was a GS alum. It must be nice
to have friends in high places.It’s no risk and all reward for GS and the Wall Street greed-chasers. Is the market really without consequence? For GS, that
seems to be the case.I rate GS a B or buy.
NEXT: Wrath – TASER International
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Deadly Sin: Wrath
Stock #2: TASER International (TASR)
Most of us know by now that not much good comes from anger. From an investing standpoint, acting on emotion tends to result
in bad decisi! ons. And should that emotion grow to the level of wrath, watch out.One stock that deals with those in a wrathful mood is TASER International (TASR).
The company makes a product that will ring the wrath right out of you. In fact, its product is at the frontline of civil obedience
and is now used by police squads around the country to defend us from those wrathful criminals.Shares of TASR used to be a fly high. Not so much anymore. That said, the company is a leader in the field of non-lethal methods
of compliance and will ride high again.I rate TASR a B or buy.
NEXT: Envy – Toll Brothers
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Deadly Sin: Envy
Stock #3: Toll Brothers (TOL)
We all admire those with something that we don’t have. It’s a pretty natural human condition and not necessarily a deadly sin.
Without envy there would be no capitalism. We would have no reason to strive as we do.One thing we all like to strive for is a bigger and better house (well, maybe not so much today). At the top of the housing
food chain is homebuilder Toll Brothers (TOL). This company has held up relatively
well considering the disaster in the housing market.With the bottom finally in sight, look for more to be envious of a Toll Brothers home. They are quite nice.
I rate TOL a B or buy.NEXT: Pride – Walt Disney Co.
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Deadly Sin: Pride
Stock #4: Walt Disney Co. (DIS)
Feeling good about oneself or having pride is a necessary ingredient for success. You don’t get very far without a certain degree
of confidence. Indeed, many may take that too far and have pride that equates to arrogance, or worse, but for the most part pride
is a good thing.In the animal kingdom, the lion is certainly proud of its pride. Disney’s (DIS) Lion
King rejuvenated the entire animation division of the company. The participants in that great movie certainly must feel a
little pride. Unfortunately, Disney’s offerings since have run smack dab into a consumer-led recession. This company will need
lots of pride to recover from current weakness.I rate DIS a D or sell.
NEXT: Lust – Hooker Furniture
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Deadly Sin: Lust
Stock #5: Hooker Furniture (HOFT)
It’s the oldest profession around. No, not that one.
Furniture making has been around since the 7 Deadly Sins came into existence. But lately it’s been rather “sinful” to be a furniture
maker — the homebuilding crash has resulted in fewer buyers looking to furnish homes.One of the leaders in the industry is Hooker Furniture (HOFT). The stock has
bounced off its lows and is showing some signs of life. But the move may be a head fake as the company has a long way to go for
redemption.I rate HOFT a D or sell.
NEXT: Sloth – La-Z-Boy
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Deadly Sin: Sloth
Stock #6: La-Z-Boy (LZB)
Of all of the 7 Deadly Sins, I find Sloth to be the most interesting. Originally the sin was labeled the sin of sadness or despair
or what we now label as depression. We know now that depression is a clinical condition rather than an actual outward refusal
to apply the gifts from above.So what d! o we mak e of a company that promotes sloth?
La-Z-Boy (LZB) does just that with its wonderfully comfortable and sinfully relaxing
recliner. Too bad they’re not selling very well in this economy. Apparently, we are becoming less slothful during these difficult
times.LZB is a sell.
NEXT: Gluttony – Morton’s Restaurant Group
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Deadly Sin: Gluttony
Stock #7: Morton’s Restaurant Group (MRT)
Over the last decade, most of us have been gluttons at one point or another. Nothing says gluttony like a nice juicy steak.
And in this country, that means a very big juicy steak.At high-end steakhouse Morton’s (MRT), that gluttony takes the form of complete
and utter excess. The high rollers of the world love to show off their clients and friends at this upscale restaurant, but those
days appear to be over.Perhaps the good Lord is sending us a message regarding this deadly sin. We are paying the price today with a weak economy and
collapse of upscale fine dining. MRT’s stock has been in a freefall as a result.I rate MRT a sell.
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