Why Jamie Lynne Spears' pregnancy matters to investors

Today's biggest headline is that Britney Spears' 16-year-old sister, Jamie Lynn, is pregnant. This could have more of an impact on the markets than any Fed announcement! Kidding. But just when you thought Britney Spears might be in danger of losing her crown as America's leading advocate of white trash family values, Britney's baby sister swoops in and rescues her big sister, securing that crown on behalf of the entire Spears family. (Pamela Anderson is making a run for it by divorcing -- and now possibly reconciling with -- her third husband of only two months, Rick Solomon, who is best known for his role in the bestselling adult video "1 Night in Paris," which he made with then girlfriend Paris Hilton.) More importantly, this news offers a solid lesson for investors.

Seriously -- let me explain.

You see we've all cringed at Britney's circus-like behavior and thought that maybe, just maybe, her baby sister would be spared such embarrassments. But, like stocks in the same industry, children, especially those with the same DNA, raised in the same environment tend to possess the same qualities. The Spears' sisters both have (or had) the looks, incredible talent, an unholy desire for headlines of any kind and the ability to continually make poor decisions.

Let's compare these entertainment siblings to some popular stock siblings.

The leading internet search engine companies, Baidu.com (NASDAQ: BIDU) and Google (NASDAQ: GOOG) have near identical stock charts as do solar leaders First Solar (NASDAQ: FSLR) and Sunpower (NASDAQ: SPWR) as well as the leading automobile makers Ford (NYSE: F) and General Motors (NYSE: GM). All different companies with varying growth rates, competitive advantages, valuations, etc, but when it all comes down to it, everyone's stock performance is scarily sibling-esque.

Granted, this is a very simplistic view and there are many exceptions to the rule, but the lesson here is that individual companies don't necessarily matter as much as what industry they're a part of and, perhaps more importantly, investor's perception of that industry. So, take note, you must not only thoroughly research individual companies, but all the industry/environment-related variables too – so quit wasting time reading the gossip pages!

Timothy Sykes writes the blog timothysykes.com, is a former hedge fund manager, the star of the TV show Wall Street Warriors and author of the book, An American Hedge Fund: How I Made $2 Million as a Stock Operator & Created a Hedge Fund

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Last updated: February 10, 2012: 09:44 AM

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