Invest in What You Know

 In Mountain Money Monitor

Legendary investor Peter Lynch coined the phrase “invest in what you know.” Mr. Lynch believes that individual investors can identify economic trends simply by noticing what is happening in their lives. An example would be dropping your child off at school and noticing that everyone is wearing the new Curry 3 basketball shoe so you go home and buy Under Armour, Inc.’s stock (UA). This is sound advice that can be practiced on the ski slopes.

Let’s say you are sitting on the KT22 chair or strolling around the Village and you notice that everyone has K2 skis and are wearing Marmot jackets. Both of those companies are owned by global consumer goods behemoth Newell Brands (NWL). Newell also owns Squaw Valley favorite, Volkl skis, and Marker USA. And when the snow is gone, Newell supplies your camping gear, Coleman and your fishing gear, Berkley, Shakespeare, and Abu Garcia. If you are a baseball fan, Newell supplies that stuff as well via their ownership of Rawlings Sporting Goods.

Summer is a long way off so let’s stick with the winter fun you are currently enjoying. For some folks, investing in the maker of Rubbermaid for a little ski exposure is not what they are looking for. An alternative is Portland’s own Columbia Sportswear (COLM) with those unmistakable advertisements staring the company’s chairperson, Gert Boyle. Another conglomerate that you will see all over the mountains (and the beach) is VF Corporation (VFC). VF will keep you warm in winter, cool in the summer, and organized all year round. Their brands include The North Face, Smartwool, Timberland, Reef, Vans, Eastpak, Jansport, and Eagle Creek. If you are looking to diversify internationally, check out Finnish company, Amer Sports Corporation (AMEAS – Helsinki Stock Exchange). Their brands include Salomon, Atomic Skis, Arc’teryx, and Suunto. And, if you don’t like the summer sports products made by Rawlings, Amer Sports owns Wilson Sporting Goods. These are just some of the brands you can invest in publicly. Many more well-known brands are owned by private equity firms.

Sometimes you need a break from the endless laps on Headwall or the endless lines at Shirley. If that’s the case, trade your board in for a snowmobile. BRP, Inc (DOO) supplies the fun with their line of snowmobiles under the Ski-Doo brand. They also offer summer fun with the Sea-Doo, Can-Am and Lynx brands. With this early snow, Squaw’s direct competitor, Vail Resorts (MTN), should show a stronger 4th quarter than expected. Squaw Valley and all the other resorts not owned by Vail Corporation celebrate making turns on Turkey Day as well. But Vail Corporation is the only one that is investable. Early snow does great things for the hotels in the area as well. The Hyatt Lake Tahoe (H) in Incline Village and the Ritz Carlton at Northstar, owned by Marriott (MAR) will benefit handsomely.

Of course Sierra snow doesn’t guarantee a good ski season everywhere! We all remember the winters of 2013, 2014, and 2015 when Whistler was getting dumped on and we were sunbathing. So does the Vail Corporation which may be why they recently added Whistler to their ski resort portfolio. Vail Corporation’s ski destinations also includes Vail, Beaver Creek, Breckenridge, Keystone, Heavenly, Northstar, Kirkwood, Park City, and The Canyons! If American ski resorts aren’t your thing, how about skiing “Down Under”? Event Hospitality and Entertainment (EVT) owns movie theaters, hotels, and the Thredbo Ski Resort in Australia.

Enjoy your winter and keep Mr. Lynch’s advice in mind. If you are driving home in your Toyota (TM) or Audi (VOW) and can’t remember what brands you saw and which seemed the most popular, don’t panic. It’s all on your GoPro (GPRO)!

Published in the Squaw Valley Times on December 3, 2016

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