ebook essays pieces of the puzzle
Wednesday, July 18th, 2012
on the links

On Sunday, the “champion golfer of the year” will be announced, so it’s time for a posting with a golf theme.

Around the time that the top of the green mountain was forming in the upper panel of the chart above, I was in a limo, riding out to the National Golf Links of America.  A portfolio manager from another firm was explaining to me that the demographics were such that golf was going to be a huge growth business and that stocks like Calloway Golf (ELY) were destined to climb much further.  I thought that he was talking his portfolio in more ways than one:  He felt that everyone would love golf like he did and he owned the stock himself.  (The broker-sponsored outing that we were on included a couple of days of golf and an overnight stay in the famed National’s clubhouse.  Nice work if you can get it.)

It was a time of prosperity and bull markets and, thanks to the National Golf Foundation’s campaign to build “a course a day,” there were golf courses and developments popping up all over.  It was all quite unsustainable.  Now many courses have closed and many more are limping along, including some championship-caliber clubs.

The equipment business has been a struggle too, as ELY shows.  The stock has been rolling downhill since my limo ride, the bottom-line operating results have been punk, and it’s been hard to keep sales growth above the zero line for any length of time.

I wonder when that guy sold his ELY.  (Chart:  Bloomberg terminal.)

If you fancy golf, you might be interested in some essays I have written about investment process that are tied to it.  What do you do when you are out of position, on the course or in the markets?  How well do competitive keys on the golf course translate to business and investments?  What is in a number?  And what happens when you get stuck in one dimension?