2020 was a bad year for a lot of industries, but not golf. Interest in one of the few naturally socially distant sports is up. And a couple of golf stocks are on the rise too.
Last year was turned upside down in many ways. That includes the sport of golf and golf stocks.
In recent years, golf has seen its active player numbers steadily decline as baby boomers age and youngsters eschew this traditional country club sport.
Who would have thought that its popularity would surge during a pandemic?
Despite the pandemic, golf rounds played in America were up 14% in 2020 (2021 data is not yet available), according to industry research firm Golf Datatech. Golf is the rare sport that can be played while maintaining social distancing.
The current stock market is creating huge opportunities to invest - even during a pandemic. And unless you majored in finance or are a stock broker yourself, you may not feel confident enough to start investing on your own.
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Golf Stocks on the Rise
Golf stocks such as Callaway Golf (ELY) bounced backed from the COVID-19 pandemic, posting strong sales and profits well ahead of 2019 as golfers with cabin fever escaped to golf courses across the globe.
One area of growth are golf club and ball sales, said Callaway Chief Executive Chip Brewer, while the company’s apparel brands remained “resilient” in the wake of the economic downturn.
“The golf business is experiencing unprecedented growth and is in a position of strength, and our brands are very strong,” said Brewer in a conference call with Wall Street analysts.
ELY stock is up 72% since the start of last summer (June 2020), and rose as high as 37 this June before retreating the last three months.
Acushnet Holdings (GOLF), which owns Titleist and FootJoy, is another golf stock that indicated a big turnaround, and CEO David Maher told analysts late last fall that “the game and business of golf have been incredibly resilient over the past few months.” The company said that demand for golf balls had been particularly strong, indicating a pickup in rounds played.
While it hasn’t matched ELY’s recent returns, GOLF stock is up a healthy 22% year to date and 41% in the last year.
Golf and investing have both been a big part of my life. When I was an investment advisor with a Wall Street firm, one of my marketing strategies was to make the rounds at country clubs to give luncheon talks to prospective clients.
The topic was, “The Traits Shared by Great Golfers and Great Investors.”
It is remarkable how many of the traits of world-class golfers can be applied to making all of us more successful investors. On top of the golf stocks I just gave you, here are some of the highlights of my talk that might help you as golf season is in full swing all across the U.S.
6 Tips for Being a Successful Investor and Golfer
Get organized with a smart, conservative strategy and realistic goals
This is very important. To get ahead, you must get organized. Great golfers always have a strategy in mind for every hole before they begin. They carefully chart a course and set specific targets that can be adjusted for different weather conditions. Unfortunately, amateurs (dare I say hackers) give little thought to strategy and usually have no plan at all.
Keep your head when things get rough
The roguish, stylish, and flamboyant Walter Hagen usually arrived on the first tee in black tie and always expected to hit three or four poor shots a round. This relaxed attitude led to him staying calm when the inevitable shot went astray. Remember, golf and investing are not games of perfection. When stock picks go south, cut your losses and get back into the game.
Be deliberate, patient, and play the probabilities
In golf and investing, patience and consistency is the magic formula. Having one great round or a few good stock picks in a row will not lead to success. The greatest golfer of all time, Jack Nicklaus, always played the percentages to keep his ball in play.
Proper preparation prevents poor performance
Professionals – in golf and investing – prepare carefully and follow a set and steady routine. Investors would do well to carefully emulate the pros. Don’t jump at every stock pick that comes your way. Do your research, find and stick with a proven investment strategy that suits your personality, time frame and financial goals.
Build a talented team
If you go to the Masters or any other professional tournament, you will notice that a pro does not go it alone. Most have swing coaches, sports psychologists, sports agents, financial consultants, and of course professional caddies to help them play at their peak potential. The same goes for investors. Get a good CPA and lawyer, plus some talented investment help from trusted and independent sources like Cabot Wealth.
Look overseas for value and growth opportunities
Golf has always been an international game. In fact, the U.S. Open – one of the four major golf tournaments in a calendar year – tees off next week at Torrey Pines Course in San Diego. Of the 156 contestants in next week’s tournament, 71 are international, hailing from countries such as China, Spain, France, Australia, Mexico, Thailand, Malaysia, Argentina, Columbia, Fiji, India, South Korea and South Africa. Are you equally open to scouring the globe to find companies trading at value prices all over the world?
Remember, investing, like golf, is not a game of perfection. Having the right mindset, strategy and preparation simply increase the probabilities of success.
Good luck with your golf and your investing! Which golf stocks are you investing in?