At the end of last year I selected The Home Depot (NYSE:HD) as one of my seven picks for the coming year in the post You don't have to be 007 to find the best picks for 2007! At the time I took notice of it my thoughts were reinforced by an article in Money Magazine by Michael Zivy, who also recommended Lowes as worthy of investment consideration.

Now, just over two weeks later, I have read many more similar reports touting the stock. No less than James Cramer of TheStreet.com, Barron's, Fortune, and more recently BusinessWeek wrote it up after the abrupt resignation of CEO Bob Nardelli. I am sure I have seen it discussed in other places too, but the point has been made. A crowd within the investment world has taken an interest in Home Depot stock. No such crowds have been reported in the actual stores.

Which is more important to the success of the company: more customers or more Wall Street players? In my own analysis I was looking at financial data and not trying to place any bets on when there might be a large positive swing in customer traffic. Are the investment world gurus (I'm not there yet) betting the stock rises because they are predicting more traffic, or is the stock going to rise in the short run even in the absence of customers simply because they say so? Short term the prognosticators do have an impact. Not only does the word on the street affect stock prices, but there are those that are leading global investment houses and placing real bets the stock will rise, so it must.

In the long run it will be customers and cash flow that will impact the stock price. And management decisions and the macro economy will impact customer flow. But, when I see a crowd I usually go the other way so I take pause to revisit my thinking on the subject of Home Depot. I am not fond of crowds but when they gather it is often worth knowing why. In this case I think my reasoning still has merit, so I will write this off to everyone jumping on the bandwagon. I do not claim to be the first one on the bandwagon, and do not know now when and if I will jump off. I will not be changing my seven picks during the year, so I guess I'm going along for the ride.

Check out my other posts for BloggingStocks here.

Sheldon Liber is the CEO of a small private investment company and the vice president for design and research at an architecture & planning firm.