GAIA, My Stock Of 2008

Full disclosure... it was also my stock of 2007. A three-bagger, not too bad.

Anyway, even though stock contests are inherently "gay" and even though he deletes the comments I leave on his blog, I've entered GAIA as my stock of the year on Ragin Cajun's blog.



Why? Well, yoga may have seemed somewhat "fad-like" a couple of years ago. But the above ad is for a little company known as, (get this) "The Gap." When The Gap does an advert with a supermodel in a yoga pose, you know that yoga has gone mainstream.

Also, my mother-in-law bought my wife a Christmas gift from Gaiam this year.

If it's getting through to my mother-in-law, it's mainstream.

Oh, and it was Wallstripped twice last year. Most recently in September. That means it's hot.

The stock that you use to play the "yoga lifestyle" is GAIA. They're one of the largest distributors of yoga and fitness DVDs. You can find these DVDs at a quaint little store named "Target."

Take a look at the monthly, which shows the lifetime price history of the stock since it IPOd in 1999.



It has recently busted out to all time highs on good volume after tripling in 2007. I know that buying at highs sometimes freaks people out, but I'm more of an IBD type long-term investor. I like to buy stocks high and sell them higher. Also, when you see volume increase, it means institutions are getting involved.

For the record, using the IBD stock checkup, GAIA rates an 89, or B+.

Anyway, here's the daily.



Again, I like the volume surge when the stock broke out about a couple of weeks ago.

Another interesting aspect of this pick is the burgeoning short interest. GAIA sports an 18% short-interest... not too shabby for a stock near its all time high.

Now, perhaps you're thinking to yourself, "Yeah, yoga mats and floppy hemp clothing sound great, but what kind of growth can you expect there?" You have a point. That's the way people "get in" to Gaiam, with said mats and floppy clothing.

However, once GAIA has people convinced that getting in touch with their inner OM and living healthy is not only good for them but also cool, they sell them "green living products" and "eco-gadgets."

People change the way they think about their body and their relationship to it, and from there they question their relationship to the world around them.

It's an ambitious strategy, but it seems to be paying off. Plus, turn on the news. They're getting plenty of free advertising because all anyone talks about lately is "going green."

Simply put, in 2008, green means growth. Green is sexy.

Now I know I don't normally give individual stock picks here, but put this one on your radar.

I think we're in for some market weakness and finding uptrending stocks will be a challenge in the short term. While the overall market "shits the shower," watch for stocks that display relative strength amidst the weakness. I think you'll find that if we hit a "rough patch" GAIA will hold up.

If and when it does, I'd be a buyer.