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Home > Saturday 8 March 2003

What They're Reading, or, A Humorous Guide to What Stocks to Buy
I find Amazon.com's Purchase Circles an interesting gauge of what's on the mind of the employees of various companies, as an additional insight into these companies. Especially interesting when the companies are in distress, or their stock is tanking, or they're undergoing layoffs, or all three.

During the boom years a few years ago, oftentimes the top ten books for a company were all about leisure-time activities -- Let's Go type books on camping, fishing, and all the other -ings. In other words, the last thing the book purchases indicated was that their minds were on work. Now that times are tough, I thought it might be interesting to go back and see what's up. We'll check back in a quarter and see how the Brianstorms recommendations went!

My pet theory is that the more technical and industry-specific the books are, the more the employees are focused on the work at hand, rather than on what they could be doing if they were on vacation. And the more focused, the better the prospects for the company's stock, a quarter or two down the line. Whacked-out theory, sure (the stock buy/sell recommendations are completely and totally and arbitrarily and solely based on what I see in the purchase circles for these companies, nothing else is considered). Crazy? Sure (think about it: maybe just one employee at the company bought some books... that is not enough of a statistical sample) but hey, maybe it's better than a coin-toss or a WSJ-style dart-throw? Only one way to tell: try it out and see!

How this works: "Company name (stock symbol), today's price" is a link to the Amazon Purchase Circle for that company. At the end of the pithy comments is my buy/sell/hold recommendation. That's it.

  • Abbott Laboratories (ABT), 35.45: Three out of the top ten books are Harry Potter books. The rest are manager how-to's and my-life-sucks-what-do-I-do kinds of books. Not a single advanced pharmaceutical science molecular chemistry biotech thingamajig techie book in the list. SELL.

  • Amazon.com (AMZN), 22.97: Busted! Dreaming about mountain hiking in the Pacific Northwest, or reading Poems, or reading about Babies or books on Happiness. Nobody's readin' up on the business or the next-generation technology! SELL.

  • Apple Computer (AAPL), 14.53: It's changed over the years. Used to be mainly biographies about Steve Jobs and the founding of Apple (employees no doubt trying to find out how much of the Story of Steve is for real). Now it's how-to books on how to use Apple products. Nothing in the way of new product development or hardcore techie references. Dudes, it's time to READ DIFFERENT. Get back to basics and learn yer advanced C++ and DCS tactical databases. Your stockholders will be grateful. In the meantime, HOLD.

  • Autodesk, Inc. (ADSK), 14.10: Lots of marketing books -- the standard texts, like Crossing the Chasm and Inside the Tornado. Hey, it can't hurt. Maybe it'll help their stock, currently at 14.10. Let's check back in a few quarters and see if reading those books helped their bottom line or not. HOLD.

  • Boeing (BA), 25.84: I'll forgive the Camping in Washington book considering the rest of the list is roll-up-the-sleeves-and-get-to-work stuff on everything you'd want Boeing employees to be thinking about. STRONG BUY.

  • Cisco (CSCO), 13.24: The good news? Lots and lots of advanced nerdy Cisco techie books. The bad news? They're buying too many books on the history of Cisco! Dudes, this is the Apple trap, stop reading your own mythology and focus on the needs of the current customers, not past glories. HOLD.

  • Earthlink Corp (ELNK), 5.10: The last thing they're thinking about is work. Top book: "Single No More: How and Where to Meet Your Perfect Mate". Second is "Jack and Jill" by James Patterson. The rest of the list is equally all over the place. Anybody been watching Earthlink stock lately? SELL.

  • Electronic Arts (ERTS), 54.15: Strictly business. Books about game design and game development dominate their list. And guess what. Their stock chart is appropriately impressive. Keep up the good work, gang. STRONG BUY.

  • Enron Corporation (ENRNQ.PK), 0.049: Busy reading books about options, futures, and derivatives trading. Looks like they're back to work trying to learn a thing or two. No books on bail bonds or defense attorneys, surprisingly. AVOID

  • The Gap (GPS), 13,73: This one's a toughie, a nontechnical, retailer. So what kinds of books should they be reading? Probably books about trends, fashions, pop culture perhaps? There are some of those in The Gap's list, but too many novels and leisure-time books for my taste. HOLD.

  • Intuit Corp (INTU), 47.74: Not one, not two, but three books in their top ten list, three books on Six Sigma!. Four books on UI design and usability. Couple books on Intuit products. But the #1 book is about crime stoppers. What's up with that? Until I figure that one out, HOLD.

  • Microsoft Corp (MSFT), 23.56: Eeeesssssiiiinnntttt thaaat eeeenterrrresssteeeeng. The number one book, costing $85.60, is Yookoso! An Invitation to Contemporary Japanese (Student Edition + Listening Comprehension Audio Cassette). So like is MSFT moving to Japan or something? Or acquiring someone big in Japan? Hmm. Like Apple and Cisco, there's too many books here on Microsoft the company itself. Stop believing the hype and get to work innovating on new stuff. HOLD.

  • Qualcomm (QCOM), 35.18: Busted! Daydreaming about everything but work. What's their number-one book? Pat Welsh's Southern California Gardening: A Month-to-Month Guide. Then there's books on how to get the most out of your stock options. And on and on. Normally, they'd get credit for buying a book called Getting Things Done but the rest of the list is just too scatter-brained. SELL.

  • SBC Communications (SBC), 20.49: So what's on the minds of the phone company employees? How to Bamboozle the CLECs? How to Annoy Your Customers? No! Surprisingly, they're mainly buying technical books, telecom and javabeans and cisco this and that. There's a little bit of Harry Potter and Who Moved My Cheese but their list is dominated by work references. A hopeful sign. ACCUMULATE.

  • Symantec Corp (SYMC), 43.54: All techie books. Interestingly, the #2 book is After The Merger. Hmmmmm. Someone buying Symantec, or is Symantec buying someone? Hmmm. All those techie books are paying off. BUY.

  • 3M Corp (MMM), 124.50: Good grief! Eight out of the ten books listed are about Six Sigma! They're even buying the Six Sigma Pocket Guide! Major Six Sigma Company here. Who knows, maybe it's working. We'll see. ACCUMULATE.

  • Verio, Inc. (owned by NTT): Acquired by NTT in Japan a while back, but Verio's purchase circle list was just too great to not mention here. #1 book in the list: How the Internet Works. #2 book: How Compuers Work. While there are some techie books in there, my eyes glazed over when I saw Nancy Reagan's I Love You, Ronnie in the list, and I stopped looking. SELL.

  • Wachovia Corp (WB), 35.11: You know it's bad for a bank stock (for any stock, really) when the first book is Who Moved My Cheese and the second book is Harry Potter. After that, it's all your standard self-help/biz book fluff. You sure you want Wachovia to watch ovuh ya money? SELL.

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