New Product Launches

If there's one time you want to buy a stock, it's right before a major product launch. This has been the case for a long time: if you'd bought AOL a week before the launch of any of the Harry Potter movies, or Coca-Cola a week before the launch of Coke Zero, or even Mc Donald's a week before the launch of the chicken burger, you'd be up.

The latest candidate to fulfill this recurring product-launch prophecy has been Sony. The launch of the Playstation 3 has generated nothing short of hysteria, from people charging up to $650 on Craigslist for a place in the queue to get one of the new consoles, to a young democrat Senator's aid using the name of his employer to get some leverage on first-mover advantage on the product. As a result, the company's stock has picked up the best of it over the past couple days.

The following chart shows Sony benchmarked against the NASDAQ over the past six months:

It's pretty safe to call that underperformance. Now look at Sony benchmarked against the same index over the past five days:

In one of the NASDAQ's best weeks since the bull market of the late 90's, Sony stock has practically doubled the performance of the index. Video gaming fans would be best off buying the stock first, then using the gains to get the new Playstation.