Value Investing

Songbird Asset Management: Not Looking For Katy Perry

Not Looking For Katy Perry by Christine Song, Songbird Asset Management

With a last name like Song, I was destined to love the TV singing show, The Voice. Each week, one singer is eliminated based on viewer voting, but not without theatric competition. The show’s producers, in a masterful move, make the two least popular singers compete in a Twitter faceoff. You then have 5 minutes to tweet your pick and the singer with the most tweets moves on. This show is full of anxiety, suspense and drama – much like the stock market. Legendary value investor Benjamin Graham once said, “In the short run, the market is a voting machine, but in the long run, it is a weighing machine.” Well, if Ben were alive today in this social media world, I think he’d say that in the short run the market is a tweeting machine.

Stock ideas can rise and fall like a celebrity tweet. First, there’s the brand power of the Tweeter, making a case for why you should buy, or not buy, the stock. In fact, there are copycat investment funds that attempt to mirror the stock holdings of famous investors. And woe to the person who owns the stock that famed short-seller David Einhorn of Greenlight Capital presents at the celebrated Ira Sohn conference! Then, there’s the power of the re-tweet, not to be underestimated. Whether in established newspapers, or by an army of Merrill Lynch brokers, stock ideas get wildly circulated like an uncensored Justin Bieber vacation pic.

But remember, in the short run, the market is like a tweeting machine. So next time you hear about some hot stock idea, it could have as much substance as a celebrity tweet. And for small company investors like myself, who are searching for the next Apple, Microsoft or Starbucks, singer Katy Perry may be ranked #1 with 78 million Twitter subscribers, but it’s the sparsely tweeted ideas that you want to follow.

Performance Update

Year-to-date through Nov. 30th, the representative portfolio was up 15.67% vs. the market benchmark Russell 2500 Index of 1.22%, outperforming by 14.45%. Since inception 1/1/11 to 12/31/14, the portfolio’s cumulative annual returns was 81.6% vs. the benchmark of 68.3%, outperforming by 13.3%.

At Songbird, we invest in a high conviction portfolio of 20 to 30 small company stocks for long-term capital appreciation. If you’re interested in learning more, please visit our website or email me at

Thank you and I hope you enjoyed this inaugural small investing insight. Until next month’s newsletter, happy successful investing!

The Story Behind Songbird

All birds chirp or make sounds, but not all birds sing. Songbirds are a special group of birds and scientists think that songbirds are born not knowing how to sing – they learn their songs over time. Thus, birds that sing better are essentially superior learners. At Songbird Asset Management, we strive each day to be better learners. We are relentless in our efforts to build knowledge in pursuit of our ultimate goal – to help you grow your nest egg of investments.

Songbird Asset Management: Not Looking For Katy Perry