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INTRO Here's my semi-annual exercise to see if I remember why I own the stocks I own, and so I can check back and see if their stories have changed. I post in case it helps others too.

GAIA (market cap $0.179B)

I consider Gaiam to be a eco-friendly retail conglomerate because of the range of healthy living, alternative energy, off-the-grid products available in their catalogs, online and mail order. They cover everything from yoga mats to power converters.

I think they are in a bit of business focus confusion though, because despite their catalogs, a recent annual report described themselves as a media company. Evidently their DVD sales are a major revenue stream. Of course, with streaming videos becoming more popular, I would like to see their estimates and strategies for the transition from DVD to electronic sales. Their relations with retail re-sellers seems to be shifting towards a more inclusive strategy, but I haven't heard anything from the company directly.

My optimism is based in changing attitudes about products that are healthier for the consumer and the planet. If Gaiam leverages its early position, it can become powerful.

My pessimism arises from the fact that Gaiam may lack a strategy and is small enough that it could be bought out or overwhelmed by larger players that enter the field. If it dithers, it loses its advantage.

They are the only company in my portfolio that is paying a dividend, which surprises me. Such small companies usually put extra cash to work for growth. I wonder why they don't.

I continue to HOLD but am considering SELLing to buy into their spin-off Real Goods Solar (RSOL), of which I am also a shareholder, or possibly an innovative micro-cap company.

DISCLOSURE LTBH since 2006, customer for years, and a RSOL shareholder.
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