“A wise man can hear profit in the wind.”
-22nd Rule of Acquisition
Last year we published an article entitled Sam Adams: The Waking Giant. In it, we compared The Boston Beer Company, commonly referred to as “Sam Adams” after its flagship beer, to a slowly waking giant, and made the case that the brewery was poised for a rebound particularly in regards to the company’s stock price (NYSE: SAM).
At that time, the company’s valuation was taking a beating with shares trading for around $150 a piece down from a high of around $315 just two years prior despite being the second-largest craft brewery in the U.S. ¹ We suggested that co-founder, billionaire, and Harvard grad Jim Koch was making some noticeable and innovative changes to his typical play-it-safe brewing philosophy which could spell big profit for the company.
For general readability, we focused more on a shift in the spirit of the company instead of an in depth discussion of the fundamental and technical analysis behind the reasons why we felt a course-change was underway at Sam Adams.
The bear that is Sam Adams (read: Jim Koch) was getting pokes from both external forces but more importantly from folks within the company encouraging Koch to compete with other craft breweries with flavorful trending beer styles including a juicy, hazy New England IPA of its own (Boston is in the heart of New England, after all).
Moment of Truth
So how did our prediction turn out?
Let’s put it this way: if someone had invested in Sam Adams at the time we ran the article, that someone would be up about 100% right now. Not too shabby.
For comparison’s sake, if that same someone had instead put their money into a Bank of America savings account back then, they’d be up about .01% today.
To be fair, given enough time the money in the savings account would eventually yield the same return as that investment in Sam Adams. Of course, that would only take about 10,000 years, but who’s counting.
Joking aside, this article isn’t really about how we predicted a winner, but more importantly, how you can.
Channeling Your Inner Profit
Back in 1923, Edwin Lefèvre wrote what is now considered a classic investment book titled Reminiscences of a Stock Operator. Some of the most successful stock traders of the modern era include that book in the syllabus of required reading for both Wall Street newbs and gurus alike. ²
Similar to the investment philosophy of legendary money manager Peter Lynch³, Lefèvre offered a practical common-sense approach to stock trading, insisting that savvy traders use their knowledge of the world to elicit profit in the market.
Predicting that Sam Adams’ share price would bounce back wasn’t magic. It was simply the result of being immersed in the world of beer and then intersecting that knowledge with an understanding of the stock market (20 years’ experience in trading stocks doesn’t hurt either).
If you made a bundle by investing in Sam Adams recently, cheers. If you missed that boat, don’t sweat it because as seasoned investors know the deal of the century comes along once a week.
The more important message to you, my dear beer-loving reader, is this: be mindful not to discount the value of your passion for beer, homebrewing or whatever else your thing might be. Often times, there’s substantial profit to be had for those who seek opportunity by applying their personal interests to the market appropriately.
This is increasingly true in today’s side-hustle economy where fortune commonly shines its face on the business-ninja who aligns their passion with market conditions.
From Poke to Woke
A year ago, we suggested that Sam Adams was a bear with the passion and talent to lead again. The bear’s eyes were just starting to open. It just needed a little poke. That the bear is now woke.
Today, we’re suggesting that the same is true for many of us. Some of us just need a little poke.
Hi, I’m Dan: Advocate of day-seizery, dream-manifestification and community giving-back-ery.
1. “Brewers Association Releases 2017 Top 50 Brewing Companies By Sales Volume.” Brewers Association, 23 Mar. 2018, www.brewersassociation.org/press-releases/brewers-association-releases-2017-top-50-brewing-companies-by-sales-volume/.
2. Schwager, Jack D. Market Wizards: Interviews with Top Traders. John Wiley & Sons, 2013.
3. Lynch, Peter, and John Rothchild. Beating the Street. Easton Press, 1993.