A few weeks ago there were several IBC blog posts bashing FB and YELP. I should know, I wrote several of them.
Look at them now. FB is up more than 20% since June 1. YELP up for 50% gain.
RaginCajun and ChessNWine opened and closed FB positions. IBC blamed FB for everything from egregious stock losses to impotence. There was no more unpopular stock than FB at ~$26.
Let’s be honest, this is a Costanza market. When there is that much hate for a stock step back, clear your mind and consider: is this a buying opportunity? Buying the blood would have been extremely profitable here.
Never catch a falling knife you say? Well, I think these stocks were hammered on sentiment. Moods change faster than fundamentals. Negative news can fade quickly. Long term I maintain FB and YELP are not buys for my style, but looking back I can see where I missed a huge opportunity.
Hindsight is 20/20, but sometimes history repeats itself. If you fail to see that pattern repeatedly you are not learning.
Buying those stocks at the same time I penned missives outlining their flaws would have been hard. But there are times that’s exactly the right thing to do.
Sometimes we’re all John Snows in this market.