| Ail said:
It was mostly recession related. People flew the stock market in droves and every stock tanked ( except AAPL but Apple is a different story..). Then in 2009 when things got better people picked first the best growth stock to get back into the market and no matter what you say video gaming stocks are not growth stock as their business is very cyclical and they have to reinvent themselves every few years.
ATVI recovered well because with WoW it has a business less cyclical and it was able to keep being profitable during that time. And ATVI is more like a utility company than a video gaming company. They have regular profits, they pay a dividend and they do huge stocks buy back which help keep maintain the stock price... TTWO did well because it demonstrated that it was not as much a one man pony show as it was in the past ( Read Dead Redemption, L.A Noire and NBA2K have been doing very very well these last few years). And TTWO is still a good acquisitions target which is keeping the price high, I'm not sure who would be interested in buying but if I had the money and I was to buy a gaming company, TTWO would be the one...
As for the TTWO spike, my original target was 17$ but with the recent market rally I can now see the stock going as high as 20$. If the stock spikes the day they announce GTA5 release date I will sell that day, if it doesn't I might wait until the week the game actually releases..( I've seen the stock spike as much as 8% up on those kinds of occasions, keep in mind that some of the GTA5 expectations are already priced into the current stock price so the spike could be lower). No matter what I doubt I will keep my TTWO stocks much past the actual GTA5 release date. |
Okay, so important points are the cyclical patterns in the VG market (usually spikes at the start of the gens), economical resessions, other more stable businesses (MMOs), stock handling (ATVI's example), game announcements, and other factors we still will discuss as we go.
We'll keep an eye on the TTWO stocks and take a snapshot after the release at end of 2012, mid 2013, and see how the pattern goes. The 2005 spike is more gradual, while the 2008 spike is really a surge, so selling after a pattern like that would be perfect. Odds are the 2008 pattern will repeat instead of the 2005 one, but we'll keep an eye on it.
@buying from the mind rather than the heart. I 100% support that post. It's about business, not about preference. But, we still need to develop a good gut and then learn to trust it. Even then, gut =/= heart.
