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Investments with a Kick—What Soccer Can Teach You About Finding a Great Stock

Real Madrid's Portuguese forward Cristiano Ronaldo gestures at Cibeles square in Madrid on May 27, 2018. (Photo by BENJAMIN CREMEL/AFP/Getty Images)

Great investors find hidden jewels in places most people would never think to look. They have a knack for connecting dots few other investors see.

A throwaway story in American sports pages recently noted that a world-famous soccer player, Christiano Ronaldo, had changed teams. That wasn’t big news in the U.S. because NBA superstar Lebron James changed teams, moving from Cleveland to Los Angeles about the same time.

But, chances are savvy investors positioned themselves for long-term profits following Ronaldo, while Lebron James and his Los Angeles Lakers would be glad to take their money for tickets.

The moral is that, for investors, just about any part of life can lead to a discovery. The restaurant chain you found and love could be good for a look. The computer you’d like to throw against the wall might be a stock to sell or avoid. When your peers are leaning back rehashing their high school and college glories, you’re apt to be learning about blockchain and drones.

And in this case, even the soccer team you follow could teach you a thing or two. On July 11, Juventus, the Italian football club (soccer to some of us) announced that the megastar forward is leaving Real Madrid. He just signed a four-year deal with Juventus.

Juventus is that rarity in the world of sports—it’s investible. You can buy shares of its European stock (JUVE).

Whether or not you are a Ronaldo fan, the reasons this news could make JUVE a better investment are the same ones that make any business a better investment.

1. Increased Sales Potential Is An Investible Trend: Ronaldo has a mile long line of fans and can reach out to his 134 million followers on the Instagram platform and 74.5 million followers on Twitter. More fans following the team means more sales for Juventius. More tickets. More TV time. More gear. More sponsorship money.

2. Key Talent Matters: There’s a reason companies announce every time someone interesting and important joins the board or a talented newcomer takes over a key management position. No asset can propel a corporation forward more effectively than talented personnel. Juventus is hoping Ronaldo, a five-time Ballon d’Or winner, given to the world’s best player, will create a large base of new fans. That’s almost a sure thing.

3. Essentials Count, Noise Doesn’t: Juventus is a sports company controlled by the family that owns an even larger company, Fiat. The Ronaldo trade made some Fiat workers so angry they went on strike. A $130 million tab for a single worker! But Juventus isn’t part of Fiat Chrysler even if the Agnelli family owns big parts of both enterprises. This is news to ignore, just like those one-penny earnings misses that panic investors who only read the headlines and miss the rest of the story. Like bigger sales… Like Ronaldo will probably bring to Juventus, no matter what the workers at Fiat say.