Rule #1 Finance Blog

With Investor Phil Town

InvestED: Ep. 180- What Nike’s New Campaign Means for Their Stock

This week we’ll take a step back and remind ourselves how and why we practice investing the way that we do in Rule #1 Investing. We’ll take a look at the recent controversial Nike ad and what it means for their bottom line.

 

 

In Episode 180 You’ll Learn:

What’s Going On with Nike?

  • Nike recently released an ad featuring a controversial football player, Colin Kaepernick.
    • It is important to consider social situations that can impact the price of a stock.
  • Initially, Nike’s stock price dropped.
    • Following shortly, Nike’s stocks rose to an all-time high.
  • In creating this ad, Nike has followed one of the tenants of Rule #1: put your money behind your values.
  • This ad campaign proves that stock prices are different than value.
    • Nothing about Nike’s business has changed, but the ad campaign has massively impacted their numbers.
  • Could this be a signal that Nike is worth more? Is this simply a fleeting event?
  • We want to buy companies in which the MOAT is so large, someone with no experience could run it, thereby protecting your investment.
    • We want to put our money in big boats that won’t sink.
  • An example of emotions dictating the investor’s decisions.
    • Be wary of pulling out of a company solely due to a difference in opinion – what does it really mean for the bottom line?
    • This is different than personal values. You must consider whether or not a difference in values is worth pulling out of a company.
    • Nike and others are looking at their bottom line asking whether or not ads or other such decisions warrant utilizing perceived social responsibilities.
      • Approaching advertising with an eye toward social issues can be either beneficial or detrimental. It is up to the company to decide the importance of that information.

Danielle and Phil Recommend:

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On the InvestED podcast, Phil and his daughter Danielle shine a light on the successful investing strategies that gurus like Warren Buffett have used for 80 years. Listen in for a great stock market education on basics, learn how to invest on your own, and follow along with real-time examples and investing tips from week to week.