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Callaway Golf, an SPY beater? S09P1: Going agianst the tide.



January 03, 2009 – Comments (0) | RELATED TICKERS: ELY

Not many of my fellow fools support a thumbs up on Callaway.  When you do the research you can see that Callaway has not beaten the S&P over the last five years.  We're in a recession, money is tight and golf is a luxury, right??  Since I seem to be a contrarian on this one, I thought I'd share some reasons why I think Callaway, ELY will beat the S&P/SPY over the next year.  I'm looking for reasons that I'm wrong!???

 1.  The sun will come out tomorrow, (just not sure when tomorrow is). Sunlight attracts golfers like a moth to the flame.

2. The market will recover (I have no idea when, but I like being a bull, it's too depressing to be a bear, but I would like to hibernate a few months).  People will feel good again and want to go golfing.

3. Flowers will bloom again, (when golf courses can afford yard maintenance and where the divots aren't; also assumes the bee colony will survive).  Golfers will feel spring in the air and a call to the links.

4. The baby boomers who saw their portfolios collapse will have money again, (see number 2).  Baby boomers are increasing in numbers at full steam now. Time is on their side, and in their hands.  After this recession, making money working their fingers to the bone to see it evaporate in their market vs hanging out golfing will be a no brainier.

5.  Contrary to popular thought, golfing is NOT an optional sport.   It's a required way of life.  Husbands do it to get out of the house and away from their husbands. Wife's do it to get out of the house and away from their husbands. Couples do it sometimes together on vacations, (to get out of the house and away from the job).  I do know that if you golf you will find the money.

6. Undervalued and pays a dividend.  Not an S&P beater, but certainly an S&P contender who has taken a few too many hits over the head than it quite deserves.  Good cash flow, peaks in Feb and June (Christmas and pre-golfing season). 

7.  Many a golf club has been smashed lately by upset investors looking for somewhere to take out their investing frustrations, (or intentionally because they want/need the newest set of clubs), that will need to be replaced..

8. Tiger Woods will continue to win, driving the ambitions of youth and adults everywhere to try to improve their play well enough to make a living "playing golf". 

Disclosure:  I don't golf; I can barely count to 4.  I don't own any golfing stock, but I hear it's a great place for Fools to get Stock advice. (Causing more golf clubs to be broken).

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