Just for fun this AM -- I checked out Facebook (FB) chart and technicals....
OH MY is about all I could come up with. WOW! Here's a real learning experience for newbs to investing. When you are absolutely CONVINCED that you just couldn't loose on some investment.... just go look at this bad boy.
Stretch the chart out to "ALL" and you'll see why I always reference these charts. This is a true "fell off a cliff" chart vs the low on the left and higher on the right that I preach. THEN I looked at a couple other metrics... and it gets worse! The P/E (price to earnings multiple) is 106! That means that the CURRENT price of their shares - even at these lower prices (only lower relative to the ridiculous valuation of the IPO).... that the share price is 106 times HIGHER than they EARN. Let's compare that to APPLES (AAPL) who's share price SEEMS ridiculous -- but their P/E is only 15.8!
I'm not a P/E guy but it does "matter". It matters when the P/E is HIGH --- because the company will have to GROW INTO the P/E... so they're going to have to have some stellar earnings GROWTH in order to get that ratio back to some normal point (whatever that is). It also matters when the P/E is low because that signals a complete lack of interest in the company by "the market" or that expectations for the company are for it (earnings) to SHRINK - and that's certainly no way to invest! It's why you can't just choose one metric to hang your hat on.
Here's the other big reminder. When they say "only invest money you can afford to loose"... it's because they're RIGHT. Because just when you think you've found the next Microsoft or Apple.... it might just bite you in the arse.
If I was a Facebook "fan boi" --- which I'm not because my kids have already moved on from it, and that spells death watch to me --- the play was to buy it -- and since it didn't 'work' right out of the box --- sell it --- and sit on the sidelines and watch and learn... then if you still were a fan -- buy it back at the lower prices and only buy the number of shares you had - not the amount of money you'd invested. SO you'd have bought at 40 - sold at 35 - and then bought back in at 19 or lower... and sitting on 500 shares at 19 is way better than 500 at 40 BUT that still might not work so you come back to that "don't invest money you can't afford to loose".
Look at Kodak...
