Charles Payne

An Investing Lesson: Going with your Gut

Individuals know so much more about "hot" stocks because the public determines winners and losers, (Sorry, President Obama). However, they have not gotten into the habit of connecting the dots. Take restaurants for instance: as much as disruptive technology and business models are associated with technology, it goes for all industries, including fast food. Recently, Consumer Reports surveyed 32,000 subscribers to rate the best-tasting food chains, divided into four categories (burgers, sandwich, chicken, and burrito).

Amazingly, the biggest names in the industry came in at the bottom of their categories with McDonald's finishing dead last out of all 42 restaurants surveyed. We spend a lot of time talking about disruptive technology and business models in other industries, but the fact is that every industry goes through phases where someone comes up with a better mousetrap. It is one of the reasons I am not a big fan of anti-monopoly action by the government.

The free market will find a way to challenge the biggest company with the largest market share and eventually make a dent. In the meantime, for those grousing about the market being intimidating, hard to understand or rigged, here is a lesson on why you are brilliant and need to listen to your gut.

Category

Restaurants

Top Rating

Lowest Rating

Burgers

21

The Habit Burger

McDonalds

Sandwich

15

Portillo’s Hot Dogs

Au Bon Pain

Chicken

8

Chick-fil-A

KFC

Burrito

8

Chipotle Mexican Grill

Taco Bell

In the chicken category, Popeye's Louisiana Chicken tied for the second-highest ranking on taste. So, for those who have made the shift away from KFC, it would not be a surprise that the shares of their new favorite have outperformed the larger rival. Yet, I would be shocked if more than 1% of the regular Popeye's diners actually own the stock.


Charles Payne

Charles V. Payne is a regular contributor to the Fox Business and Fox News Networks. He is also the Chief Executive Officer and Principle Analyst of Wall Street Strategies, Inc. (WSSI), founded in 1991 which provides subscription analytical services to both individual and institutional investors.