Chip Blue
The Blue Chip Stock, R.i.p
Have you ever heard of a “Bo Derek Stock?” Me neither. But it’s a term listed in the seventh edition of Barron’s Dictionary of Finance and Investment Terms. When I was in college, we had to buy this book, and I’m embarrassed to say that the early edition that I bought back then did not seem half as thick as the current version. And I think the reason for the bloat of the new edition is that many dated terms have yet to be deleted.
So, what’s a stock that meets the Bo Derek category? The dictionary says it’s a…
“Perfect stock with an exemplary record of earnings growth, product quality, and stock price appreciation. These stocks are named after the movie “10” in which Bo Derek was depicted as the perfect woman.”
I’m sorry, but I’ve been in this industry the better part of two decades and no one – no broker, institutional sales guy, or banker, has ever used this term. If I happen to run across one of these magical perfect investments in the next two years, I’ll be sure not to compare it to a 52-year old, albeit still attractive, actress…
The term is simply no longer relevant. Just like the term Blue Chip.
A Blue Chip, so says the dictionary, is “common stock of a nationally known company that has a long record of profit growth and or dividend payment and a reputation for quality management, products, and services…”
Have you seen any of these lately?
Constellation Energy? That fails on the management test, although there might be some redemption there. General Motors and Ford? They fail on the management test, too and, until recently, failed on reputation for quality products. AIG? Fannie and Freddie? Lehman? Just fail, period.
Beyond the definition of Blue Chip is a connotation that has developed over many decades, fostered by companies the likes of General Electric. The connotation is that Blue Chips = Safety.
The notion that there are safe places to invest in the domestic equities market is dead forever. It died when Bear Stearns collapsed over a weekend, and Lehman Brothers filed Chapter 11.
The Blue Chip idea died along with those two companies. Take IBM, for example. It’s not the technology king it once was, granted, but Big Blue has been a classic Blue Chip ever since I got into this business. While its stock has taken a hit, the company has largely been above the fray – untarnished in the media by the digressions of the big financials and flawed business models of the domestic auto makers. But can anyone say IBM is a “safe” place to put your money? Not anymore. The collapse of 2008 will scare an entire generation away from investing.
From a capital markets sense, this could be the best thing that ever happened. No matter how polished a CEO is, no matter how much economic impact a company wields, and no matter how interwoven it is in American society, no company – public or private – is a no-brainer investment. This is the lesson… (cough – along with not over-leveraging yourself to buy assets you can’t afford)… that America needs to take from 2008.
So forget Blue-Chip stocks completely. Just forget the entire concept.
But do not forget about investing in the U.S. equity markets. And here’s why…
It’s true that U.S stocks got blasted in 2008. But of the 200 top stocks that actually appreciated in 2008, 196 of them have market values of $2 billion dollars or less. That means, of the top 200 best-performing stocks of 2008, 98% of them were small-caps. In a list like that, you do have to separate the bulletin board issues with no volume from the legitimate trades, but the fact remains that several small-caps performed tremendously in a horrid market. Below is a sample of the list:
Small, Micro, and Nano-Cap Stocks Fill the Top-200 List for 2008
So even in the worst market conditions most of us have ever lived through, small-cap investing shined. Looking back over the last 10 years, the Dow Jones Industrial Average has a 10-year annualized return of –0.45%. The S&P 500’s is –3.02%. Both indexes were decimated by 2008, contributing to the much talked about “lost decade” for investors. The Russell 2000, on the other hand, which is known as a small-cap index, has a 10-year annualized return of +1.72%. If you look back at any 20-year period in stocks back to 1926, small-caps did better than large-caps almost all of the time.
Is small-cap investing risky? Yes. It always has been and will continue to be. And so was a whole portfolio filled with shares of BSC…
Until next time,
Matt Mason
Analyst, Oxbury Research
About the Author
Originally formed as an underground investment club, Oxbury Publishing is an investment think tank comprised of a wide variety of Wall Street professionals – from equity analysts to futures floor traders – all independent thinkers and all capital market veterans.
Our goal is to provide our readers with unique analysis and ideas that will help them invest successfully – in both bull and bear markets. With the vast amount of speculation and volatility in the markets today, investors can’t afford to wait for information – they need it now and constantly.
Blue Chips(Part 1)
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PADDY FORDHAM WAINBURRANGA 180cm x 117cm BLUE CHIP INVEST $14,785.50 |
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PADDY FORDHAM WAINBURRANGA 147cm x 103 BLUE CHIP INVEST $11,828.40 |
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Marathon 100HP Blue-Chip Severe Duty Motor – NEW!! $7,000.00 |
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Power-Turn Lateral Rotation Elite Mattress System Blue Chip 9800 $4,995.00 |
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Fada 711 BLUE Catalin Bakelite Radio- NO chips cracks repairs or tube burn- EXC! $1,995.00 |
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BLUE CHIP SUPREME AIR (NEW) ALTERNATING AIR MATTRESS $1,499.00 |
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BLUE CHIP SPECIAL X, BETTER MPG REBUILT VP44 INJ. PUMP $1,570.00 |
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BLUE CHIP SUPREME AIR (USED) ALTERNATING AIR MATTRESS $1,099.00 |
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BLUE CHIP RAPID AIR (NEW) ALTERNATING AIR MATTRESS $999.00 |
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Blue Chip Apollo 3 Port with Alternating Pressure and Low Air Loss 36″ wide x 80 $999.00 |
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JAMES BOND 007 BLUE CASINO CHIP AUTHENTIC MOVIE PROP RELIC CARD RC13 MINT RARE $849.99 |
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Hagstrom Select Swede Electric Guitar Blue Chip $779.99 |
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Hagstrom Select Swede Electric Guitar Blue Chip $779.99 |
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Hagstrom Select Swede Electric Guitar Blue Chip – SESWE-BCH $779.99 |
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NEW HAGSTROM SELECT SWEDE MAGNIFICENT QUILTED BLUE CHIP LP STYLE ELECTRIC GUITAR $779.00 |
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MIMAKI Ink Sublimation Cartridge & chip – Blk, Yellow, Magenta, & Blue NIB Sb52 $700.00 |
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HONEYWELL BC7000 L1000 BLUE CHIP MICROCOMPUTER BURNER CONTROL SYSTEM $700.00 |
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BEAUTIFUL HAGSTROM SESWESDBLH “BLUE CHIP” SELECT SERIES SWEDE ELECTRIC GUITAR $699.95 |
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Blue Chip Casino Chips BCC GCR 39mm/50mm Poker Set (820 chips) + Paulson cards $675.00 |
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ANTIQUE CHINESE BOWL BLUE AND WHITE NO CHIPS .. $650.00 |
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Bally Blue Chip Bingo pinball Machine Amazing Condition $650.00 |
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RARE! NAVAJO LARRY DODGE, TOMMY SINGER CHIP INLAY NUGGET SET BLUE GEM TURQUOISE $599.00 |
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96″ Blue Poker Card Table W/ Dealer’s Slot Texas Hold’em + 1000 Poker Chip Set $485.00 |
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96″ Blue Poker Card Table W/ Dealer’s Slot Texas Hold’em + 1000 Poker Chip Set $484.00 |
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Montmartre Blue 6 Cuban Casino Chip $499.99 |
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Sapphire Ring w/ Diamond Chips – 14 Kt. Yellow Gold Sz. 8 $500.00 |
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VINTAGE 14K YELLOW GOLD .75CT BLUE TOPAZ PEAR CUT & DIAMOND CHIP POST EARRINGS $499.99 |
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Blue Chip Axon AX100 SB MIDI Guitar Controller Alesis Powertrip 8 SKB Rack Case $499.99 |
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96″ wood Ped Dealer spot Poker table w/ chip tray blue, black or red speed cloth $349.95 |
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84″ BLUE GENTLEMEN’S POKER TABLE TEXAS HOLDEM 10 SEATER + 1000 POKER CHIP SET $365.99 |
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84″ BLUE GENTLEMEN’S POKER TABLE TEXAS HOLDEM 10 SEATER + 1000 POKER CHIP SET $364.99 |
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Hagstrom Select Swede Electric Guitar (Blue Chip) $449.00 |
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1000 PCS PLCC-6 3-CHIPS POWER SMD SMT 5000 mcd BLUE LED $449.99 |
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1000 PC 0.5W 5-Chips 5mm 60° High Power Blue LED 60Kmcd $425.93 |
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1000p High Power 0.5W 5-Chips 5mm Blue LED LIGHT 60Kmcd $409.19 |
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1000 PC 0.5W 5-Chips 5mm 60° High Power Blue LED 60Kmcd $406.40 |
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1000p 0.5W 5-Chips 8mm Straw Hat Blue LED Light 80Kmcd $405.47 |
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DSQUARED² RARE BLUE PATCH CHIP-CHIP MOTHERF@CER JEANS 48 $399.99 |
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Blue Chip Foam Redistribution Mattress by Blue Chip $399.00 |
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1000PC 5mm 5-Chips 0.5W Blue SuperFlux LED 100mA 40Kmcd $381.29 |
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VINTAGE SWASTIKA POKER CHIPS VINTAGE 1920′S 60 CHIPS RED,WHITE,BLUE WITH HOLDER $350.00 |
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BLUE SPEED CLOTH TEXAS HOLDEM RACE TRACK POKER TABLE + 1000 POKER CHIP SET $375.98 |
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10 Players Texas Hold’em Folding Legs Poker Table Blue + 1000 Poker Chip Set $375.98 |
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10x 5M Waterproof 5050 SMD Blue 300 LED Strip Lights $374.99 |
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~10x5M Waterproof 5050 SMD Blue 300 LED Strip Lights $374.99 |
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10 Players Texas Hold’em Folding Legs Poker Table Blue + 1000 Poker Chip Set $374.98 |
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BLUE SPEED CLOTH TEXAS HOLDEM RACE TRACK POKER TABLE + 1000 POKER CHIP SET $374.98 |
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1000PC 5mm 5-Chips 0.5W Blue SuperFlux LED 100mA 40Kmcd $373.51 |
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Staffordshire Plate, Historic Blue, Insane Hospital Boston, 7″ Has small chip $350.00 |
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1000 PC 10mm 40° 0.5W 5-Chips Blue LED 100mA 170,000mcd $361.76 |
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1000p High Power 5-Chip 0.5W 10mm BLUE LED Bulb 170Kmcd $358.97 |
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1000 PC 10mm 40° 0.5W 5-Chips Blue LED 100mA 170,000mcd $358.04 |
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Vintage 1970s Blue Chip Savings Collection *Mint $350.00 |
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5 Tix Hot Chip FLR GA Row:GA 7/17 House Of Blues – Boston $355.00 |
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Disney CHIP & DALE BLUE Warehouse Merry Christmas Pin $350.00 |
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NEW “FISH & CHIPS” W/BLUE OVAL 37×20 NEON 500-5478-OB $349.95 |
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~10x5M Non-Waterproof 5050 SMD Blue 300 LED Strip Light $344.99 |
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ANTIQUE STYLE 1 CT SAPPHIRE+ .44 CTSDIAMOND CHIPS 14 KT WG RING $336.56 |
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Southwestern Style 925 Sterling Silver 12KGF Turquois Chip Inlay Bracelet $329.00 |
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BLUE CHIP TECHNOLOGIES PIO48 USPP PIO48 $309.35 |
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Corelle Livingware 16-Piece Dinnerware Set, Service for 4, Classic Cafe Blue $28.99 This classic pattern of blue bands in a cafe style look coordinates equally well with both contemporary and traditional home decors. Color is white with blue bands. 16 piece set includes: (4 each) 10 1/4” dinner plates, 6 3/4” bread/butter plates, 18 oz. soup/cereal bowls, and 11 oz. stoneware blue mugs…. |
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Lodge Color 6-Quart Dutch Oven $117.95 Cast from molten iron in individual sand molds, each piece features two layers of baked-on enamel. The 6-quart size is perfect for soups, stews or buttery peach cobblers, and easily goes from stovetop or oven to table to freezer. The deep colors make them excellent for serving.Product Features• Oven-safe to 400 degrees F• Freezer-safe• Tightly fitting lid seals in moisture and the k… |
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Corelle Livingware 16-Piece Dinnerware Set, Service for 4, Squared $22.99 Features: 16-pc. Squared Pattern Dinnerware. Round 16-pc. Durable Vitrelle Glass Dinnerware Set Service for 4. Cereal Bowls. Dinner Plates. Stoneware Mugs. Bread Plates. Virtually Unbreakable. Stackable Design. Microwave Safe, Dishwasher Safe,…. |
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The Beatles Anthology $53.94 BEATLES ANTHOLOGY – DVD Movie… |
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Cheap Thrills $4.61 Classic album expanded & remastered with 4 bonus tracks. Still sealed BMG club version…. |
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Flying Away $6.27 All products are BRAND NEW and factory sealed. Fast shipping and 100% Satisfaction Guaranteed…. |
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Blue Collar [VHS] $6.99 Paul Schrader had established his reputation as a screenwriter (The Yakuza and Taxi Driver, among others) before embarking on his directorial debut. Blue Collar is the story of three working-class guys at the Checker auto plant who run their local union office. Richard Pryor delivers a funny, passionate, seething performance in one of his rare dramatic roles as a rabble-rousing union man. Trapped… |
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Blue Chips [VHS] $9.95 Here’s another smart sports movie penned by Ron Shelton (Bull Durham, White Men Can’t Jump). It’s an incriminating look at major college recruiting in the days of secret payoffs, circa the early 1990s. Coach Pete Bell (Nick Nolte) seems to be the only honest man left in sports, and the pressure to win at his UCLA-like school soon takes its toll. For action fans, the well-staged games are only at t… |