Genius Investors

Sirius XM’s stock has reached the psychologically important number of one dollar per share! Who cares? Well, a lot of bloggers out there are talking about this one (see link at end). Here at GRC we don’t have much in the way of savings, and don’t require much besides for the occasional 3 pack or 6 pack. However, I think it is important to cut our teeth in the markets just like on the courts. I think Sirius presents an interesting opportunity to test our investing chops on paper at least. First a preface.

I generally think stock picking is a waste of time. Not only because doing this is usually (not always) futile, but mainly because of the many tards who get involved with it. You know the person who thinks they have come to some grand conclusion about the future of “the markets” and try to get you involved too. He is usually not in a position to risk money but does anyway. His explanation is usually filled with poor logic, severe misunderstanding of how the markets actually work, and sports analogies. “Honey, I’ve got a great plan to make us some money” “Whats that Peter?”” Well you know Robby down at the office, he is pretty good at this stuff and is buying a lot of AAPL stock and I think we should too” “O yea, hows he doing?””O man, its like hes been hitting threes for the last 6 months, the stock just won’t go down””Its like a soft toss, come on honey, you know how many ipods they sell, jesus, lets take some money from our 401k and swing for the fences on this one!”

The above being said, I realize the contrarian move often wins. People are saying this stock is crap and its runup is pure speculation and fluff. And maybe they are right, especially for a company that traded at 5 cents only a year ago. So wouldn’t the contrarian move be to snub the crowd who are skeptical of sirius and load up on SIRI? I think so. Plus some smart people give some good fundamental reasons as to why the runup may not be totally speculation (see at end). I mean, they own tons of satellites and stuff, a high technology company, the company has to be worth something right?

Lets pretend we know what we are doing, do it (on paper), and see what happens. 10,000 shares at $1.13 (Wednesday’s 2/18 closing). A simple, straight long position on Sirius for the good of GRC. I will update in a while (this play may take some patience) when the stock moves, for better or worse. We’ll make a party in the meantime. This post is too long, in the future I will keep them shorter.

http://finance.yahoo.com/q/b?s=SIRI
http://blogs.barrons.com/techtraderdaily/2010/02/18/sirius-xm-rally-keeps-going-earnings-coming-next-week/?mod=yahoobarrons