• Subscribe
  • Log In
  • Home
  • Daily Diary
  • Asset Class
    • U.S. Equity
    • Fixed Income
    • Global Equity
    • Commodities
    • Currencies
  • Sector
    • Basic Materials
    • Consumer Discretionary
    • Consumer Staples
    • Energy
    • Financial Services
    • Healthcare
    • Industrials
    • Real Estate
    • Technology
    • Telecom Services
    • Transportation
    • Utilities
  • Latest
    • Articles
    • Video
    • Columnist Conversations
    • Best Ideas
    • Stock of the Day
  • Street Notes
  • Authors
    • Bruce Kamich
    • Doug Kass
    • Jim "Rev Shark" DePorre
    • Helene Meisler
    • Jonathan Heller
    • - See All -
  • Options
  • RMPIA
  • Switch Product
    • Action Alerts PLUS
    • Quant Ratings
    • Real Money
    • Real Money Pro
    • Retirement
    • Stocks Under $10
    • TheStreet
    • Top Stocks
    • Trifecta Stocks
  1. Home
  2. / Investing

Value Investors Are Patient, Phillies Fans Won't Be With Bryce Harper

When high expectations are not met, that's when overpaying (for a player or a stock) really stings.
By JONATHAN HELLER
Mar 06, 2019 | 11:00 AM EST
Stocks quotes in this article: EBAY, VRA

My son walked in the door last week, home on spring break wearing a newly minted Bryce Harper Phillies jersey, and all I could do was shake my head. Reportedly, Harper's jersey is the biggest seller ever in the first 24 hours, in any sport, so there is quite a buzz. (In fact, my son was making Harper jerseys in the apparel store where he works, which added insult to injury). But being a contrarian applies to more than just investing; I may be one of the few Phillies fans that is not enthused by the Bryce Harper signing ($330 million, 13 years), and my beloved Phillies efforts to "buy" a championship. While Harper's done some great things in his still young career, and he's only 26, expectations for him are in the stratosphere, and we all know what happens when high expectations are not met (especially in Philly, and also within the equity world). That's when overpaying (for a player or a stock) really stings.

Within the equity world, when expectations (in this case, earnings and revenue) are not met, a stock will get hammered. When multiples are especially high, and a stock is priced for perfection and disappoints, the damage can be even worse.

As a value investor, which has contrarian overtones, you will miss out on some potentially big gains when you avoid the high-flyers, the FANGS, etc. You may own them at some point, but likely only when the valuations improve, and if and when the growth crowd moves on. Years ago, I never thought I'd own a name like eBay (EBAY) , but ultimately took a position when it became ridiculously cheap.

Newer investors need to figure out how they're wired. If you like the shiny, flashier companies that are in the news, and you don't care about the traditional fundamental metrics, than you are likely wired for growth. If you are patient, not afraid to buy more mundane names that many others are avoiding, including the dreaded "dog with fleas", enjoy digging into a company in the search for hidden and potentially undervalued assets, and pay attention to the traditional metrics, you are likely wired for value.

Don't get me wrong, there is nothing wrong with either. While I am a dyed in the wool value investor, I acknowledge that growth investors can deliver great returns, and hit home runs that I never will - situations that I avoided because I believed they were too expensive. I'm just not wired that way, I don't understand the methodology, and believe me I realize I have missed many opportunities in the growth realm. Value for me. anyway, is easier to understand and a lot more fun. For others, it is boring, and archaic.

I hope I am wrong about the Harper deal, I hope he does well and earns every penny of that $330 million (which, for comparative purposes is $100 million more than Vera Bradley's (VRA) total enterprise value). Phillies fans, however, unlike value investors, will not be patient.

Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.

At the time of publication, Jonathan Heller was Long VRA.

TAGS: Investing | Markets | Stocks | Trading | Value Investing

More from Investing

Bearish Bets: 3 Stocks You Should Consider Shorting This Week

Bob Lang
Jul 3, 2022 10:30 AM EDT

These recently downgraded names are displaying both quantitative and technical deterioration.

Let's Shine a Light on Lucid Motors as It Slides Downhill

Brad Ginesin
Jul 2, 2022 1:00 PM EDT

LCID's market cap has been deflated, so is it now a bargain, or can it slip further?

Stop Wishing, Hoping and Praying and Take Control of Your Investing

James "Rev Shark" DePorre
Jul 2, 2022 10:00 AM EDT

The most powerful thing an investor can do is embrace the idea that they don't know what the future holds.

If You've Got Time, These Three Dividend Aristocrats Should Pay Off

Bob Ciura
Jul 2, 2022 7:30 AM EDT

There high-growth dividend stocks will be here over the long haul.

Welcome to Second Semester on Wall Street, Here's How to Make the Grade

Jim Collins
Jul 1, 2022 4:36 PM EDT

Think you can own big tech? You might just get an 'F' for that. Here's what will get you on the other side of this year.

Real Money's message boards are strictly for the open exchange of investment ideas among registered users. Any discussions or subjects off that topic or that do not promote this goal will be removed at the discretion of the site's moderators. Abusive, insensitive or threatening comments will not be tolerated and will be deleted. Thank you for your cooperation. If you have questions, please contact us here.

Email

CANCEL
SUBMIT

Email sent

Thank you, your email to has been sent successfully.

DONE

Oops!

We're sorry. There was a problem trying to send your email to .
Please contact customer support to let us know.

DONE

Please Join or Log In to Email Our Authors.

Email Real Money's Wall Street Pros for further analysis and insight

Already a Subscriber? Login

Columnist Conversation

  • 09:49 AM EDT JAMES "REV SHARK" DEPORRE

    This Weekend on Real Money

    Stop Wishing, Hoping, and Praying and Take Control...
  • 07:59 PM EDT PAUL PRICE

    Very Good Quarterly Numbers From Bassett Furniture (BSET)

    Bassett Furniture blew right through analysts es...
  • 04:41 PM EDT PAUL PRICE

    First-Half Results - Putrid; Second Half Results - Likely to Be Much Better

    It's great that we're done with June. 2022 mark...
  • See More

COLUMNIST TWEETS

  • A Twitter List by realmoney
About Privacy Terms of Use

© 1996-2022 TheStreet, Inc., 225 Liberty Street, 27th Floor, New York, NY 10281

Need Help? Contact Customer Service

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data & Company fundamental data provided by FactSet. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by FactSet Digital Solutions Group.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

FactSet calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.

Compare Brokers

Please Join or Log In to manage and receive alerts.

Follow Real Money's Wall Street Pros to receive real-time investing alerts

Already a Subscriber? Login