Interesting Items for Wednesday, September 26, 2007
Bill Rempel writes about John Hussman.
Nintendo (NTODY) was mentioned in today’s Wall Street Journal, as its soaring stock price has recently given it the second largest market cap in Japan (for now).
I was generally positive on the company, but (as you’ll see below) I concluded with something far short of a clear endorsement of the stock. You would have done best to disregard my closing remarks; the stock has performed extraordinarily well since I wrote that piece. Here’s how I ended things last year:
So, if you are comfortable with Nintendo’s position in handheld gaming and you truly believe in both the company and the Wii, shares of Nintendo would be a reasonable long-term investment at this price. However, even considering the large amount of cash and securities on the balance sheet relative to Nintendo’s market cap, Nintendo isn’t a “value” style purchase based on past performance alone. Buying shares at the current price is a bet on a brighter future.
While I like Nintendo’s future prospects, it’s usually safer to bet against a revolution. So, I’d have to say Nintendo is a very interesting business that’s priced a bit too high to be a very interesting investment.