Nerds are always wrong about investments. That was the point of an amusing Howard Lindzon post the other day, that, whatever his own feelings about Facebook, he was interested because the "nerds" hate it so much.
One true glimmer of hope for Facebook – I believe one thing and one thing only, the nerds are always wrong when it comes to money and investing. They are ALL short Facebook.
Facebook aside, is Howard right? You can point to data points on either side of nerd stockpicking, but the current ardor for the big Consumer Electronics Show in Las Vegas is a good case in point.
We have a busload of geeks traveling there together, like it was Woodstock; we have wall-to-wall blog coverage, with seemingly nothing getting plugged into a wall-socket there or getting a WiFi signal without a blogger homing in on it. And, of course, we have Apple ardor. It’s all endless, and even the major media have taken a cue, with reporters filing non-stop missives from the Venetian.
But does CES matter? Or, to put it in broader, investing terms, does consumer electronics work as an investment category?
Certainly you have made oodles of money as an Apple shareholder the last few years. And there is no doubt that consumers move technology markets more than businesses do. But what if you put your money where the trend was, and followed techies into consumer electronics as a sector. Would you make money?
To take a single, sure-to-be controversial example, you wouldn’t do well if you had built your strategy around buying a consumer electronics ETF like PowerShares’ PHW. The holdings are fairly CE-specific, and it is down year-to-date, and over the last 3- and 12-months. Fade the nerds!