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Varchild2008 (84.50)

Call of Duty to buy Video Game Stocks Now

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August 20, 2009 – Comments (3) | RELATED TICKERS: ATVI , TTWO , EA

The Movie Industry was a complete disaster.  CNBC was right there declaring a "TREND" was forming.  People would rather RENT and buy DVDs than to spend $8 + $5 for Popcorn + $3 for Pop to go to the AMC, MJR, STAR, EMAGINE theatres.

Movie Industry was *DOOMED*    *DOOMED* I tell ya!

Consumer spending and jobs were falling off a cliff since 2nd half 2008.  Yet, in 2009 the Movie Industry saw a huge resurrection!  Now everyone on CNBC is talking about how much money and revenues are flowing to Movie Houses for movies like "Gran Torino," "Harry Potter," "Transformers," "Ice Age" etc.

One day they are declared dead... Now they are declared to be AWASH in cash.

hmm.... Buy Low..Sell High right?

CNBC analysts want you to AVOID buying Video Game stocks as they sit in their LOW, LOW, FLAT-LINED share prices....

They want you to only BUY video game stocks after the market goes from BUST to BOOM.

What?? By then you'll be buying Video Game stocks at their HIGHs.... And what? Sit there and wait for another BUSTED year to SELL them off?

Buy High.....Sell Low.....  CNBC is pure Garbage!!!


I actually smile when seeing these 29% declines year over year.... It means share prices for video game stocks should at least trade HALF THAT when we start to go into a GOOD year for the sector.

This is why Investors always look for "Turn-a-round" stories.  How many articles were there thus far about telling you to buy busted company's like ETFC  E*TRADE?????  How many told you (F) FORD was cheap at $1.01?

How many said Buy the BANKS as they hit their lowest point back in March????


BUY LOW.... SELL HIGH..... .Works everytime it is tried.

So, why is CNBC telling you as an investor to BUY HIGH and SELL LOW when it comes to the Video Game sector?

If 2010 is to be worse than 2009....Then that just means doing more buying as share prices get even cheaper.  So what.... 

Company's like ERTS and ATVI are so big that they can get through a recessionary period like we are in today and come out strong in the end.  ATVI is the #1 publisher and is my investment.

I chose ATVI for its top quality product franchises + insanely good balance sheet.

So... JIM CRAMER  (AGAIN) tells investors to AVOID  (ATVI).... Lightning round?

Avoid a company with hundreds of millions of dollars in CASH on the balance sheet during a Recession in which it's share price can't break $13.00??

Gee.... Think it will break $13.00 when the Video Game industry starts to look like this year's Movie Industry?

I don't care if it's TAKE TWO you buy.... ERTS you buy.. KONAMI...CYOU (chinese Video Game stock).... NETEASE.......Whatever.. Do your research and get into the market while things are BAD!!!

3 Comments – Post Your Own

#1) On August 20, 2009 at 9:17 AM, Varchild2008 (84.50) wrote:

CLARIFICATION: *Sigh*

When I said you'll at least get HALF THAT 29% decline in a good year... I meant you'll gain something like 15% what you pay TODAY for the stock (at least) for each GOOD YEAR.

Not share price gain but Fundamental GROWTH gains.
From repressed levels...15% gains each year in a GOOD SECTOR year should probably translate to at least 20-30% share price gains.  1.5x 2x growth rate.

So (ATVI) at $12.00   let's say you buy in at $12.00....

In a good sector year... you should see the price between:
$14.00 - $15.00.   Let's say $14.50. 

An increase of $2.50 PER YEAR video games do well.

Throw SHARE BUYBACK and other things into the mix and you just might see more than this estimation.

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#2) On August 20, 2009 at 10:35 AM, dividendhound (< 20) wrote:

Agreed that ATVI should be great long term.  These are not bad prices for it now.  You would want to be in it before you start seeing Starcraft II advertisements on TV and the release date becomes firm.  Any slack from reduced guitar hero sales and the like will be more than picked up by SC2 and Diablo 3.  Reduced sale prices of PS3 is a plus. 

Agreed that ATVI is a good domestic/international video game stock.  TTWO isn't bad, either.  They really suffer from not developing a diverse enough revenue stream, but people do love their games.  Internationally, I am hoping we eventually see some more foreign listings, but the major China plays are all pretty good - I like SNDA in particular, although it has definitely attracted some downgrade/upgrade funds/institutions that like to beat it up and raise it up.

 

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#3) On August 20, 2009 at 10:58 AM, Varchild2008 (84.50) wrote:

Disclosure:  I actually got in at no higher than $11.48 but as low as an $8.XX handle.  Most of my buying occured between $8.XX and $10.54.

So I am riding on a profit even if the stock dips to $11.00.
And this is before CALL of DUTY....Before BLUR....Before Singularity..Before DJ Hero....Before Starcraft II...Before Diablo III....Before Blizzard's TOP SECRET new MMO in development.

Before...before....before....all the merchandising surrounding World of Warcraft and Starcraft II and the Movie Deals.

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