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One of the joys of taking the shuttle out of La Guardia is indulging in my OJ Simpson fantasy (the one about hurdling suitcases while racing through the airport, not the one about being chased by a swarm of police cars and TV helicopters).
Because the flights to Boston and Washington are filled with experienced, day-tripping, full-fare-paying road warriors, the security lines are set apart and move swiftly. Passengers practically begin taking their belts and shoes off at the curb, so it's tempting to cut it close, knowing there won't be a long line. One recent morning, however, I cut it a tad too close and had to run just to make my flight.
I made it, but unhappily so; I had no time to even grab coffee, let alone breakfast. And as I squeezed into my seat I knew I was doomed ... doomed to eating one of those hockey-puck-impersonating bagels that pass for food on a 6 a.m. flight.
It got worse. After catching the jauntily tossed breakfast bag, I looked inside and saw a #@%*! raisin bagel. I like raisins. I like bagels. I hate them together.
But I was hungry. So I glumly set about tearing small pieces of bagel, carefully inspecting for and removing the raisins, and then slapping on some cream cheese. You'd have thought I was forced to eat poop-covered grasshoppers, I was so cranky.
With grim determination and great effort I excavated the raisins one by one. That's how I know that there were precisely 3.5 raisins in that bagel. Yes, I had a good laugh at my own expense: all that drama for nothing.
If you ask me, my airborne raisin bagel experience contains a pretty good investment lesson for what happens when anticipation (investors) collides with reality (news flow).
Here's what I mean...
The hardest part of stockpicking is knowing what's in a stock price. Ultimately, of course, the price is what one person is willing to pay and what another person is willing to sell. But it's not that simple. The price is based on a precise calculation of the imprecise (e.g., future cash flows), together with how greedy or fearful everyone is feeling.
If you think of a stock as a dreaded raisin bagel, the price investors are willing to pay is inversely proportional to the number of raisins within. Investors assume a certain number of raisins in any given bagel and adjust the price accordingly if there are more or less than expected. You can think of news flow as the blow-by-blow commentary as each raisin is picked off the bagel.
