Back in the good ole days, about 10 years ago, making money off popular momentum was easy as pie. One of my favorite plays was simply watching Wall Street Week with Lou Rukeyser on Friday nights. The show was PBS's longest running and most successful offering. Lou always had a group of fund managers on the show whom he called the Elves and each week they would recommend a few stocks that they felt would outperform the market. The standing joke was that Lou never met a stock he didn't like and, like Mr. Micawber in Dickens' David Copperfield, he was always waiting for things to turn up.
The easy money here was simply buying the basket of stocks that were recommended Friday night on Monday morning's open and holding 2 days, closing the positions at Tuesday's close. This little no-brainer system which only required you to watch TV Friday nights was a consistent winner with over 80% profitable returns for several years.
As the electronic marketplace became more sophisticated and available, and other folks recognized this easy money trade, the rush to get in on Monday's open made the trade a bit more problematic.
Just a little history there. . . .
Skip forward to present day and a follow up to the Wall Street Week format. Enter the Motley Fool, a widely syndicated company that seeks to "educate, amuse and enrich". . . kind of like Lou in a clown's suit. The Fool is bit more participatory though and has a thing they call the CAPS service wherein members rate stocks. Current top rated stock with 5 stars is KFT with 93% of CAPS members expecting it to outperform the market. Even in a recession, people gotta eat.
With KFT currentlty at 26.45 the ATM is actually a $1 OTM as we are trying to capture that gain in the play also.