On July 25th, CNBC used Facebook Live to broadcast Facebook's stock price fall while the stock market investors went rouge! Most investors think they are logical and fact-based decision-makers. But, on July 25th they showed their true colors. Adam Nash (Board of Directors @Acorns. Former CEO @Wealthfront, etc.) puts it in the best way.
Five reasons you should not sell your Facebook stock:
1) Before July 25th you were a happy shareholder.
The only reason you are thinking of selling your Facebook shares is that on July 25th, your feelings toward the company changed. Pause, and think of the 2-3 reasons you were holding onto your FB shares before July 25th. If what the media says about Facebook was not a reason for your investment in FB, what has changed?
2) You are a long-term investor who always talks about 'Buy and Hold' strategy as your primary approach to investing.
That means you invest in great businesses and Hold them through thick and thin as long as they stay great businesses. In the short-term, there is a limited relationship between the strength of a company and the fluctuations in the stock price. What did you think Buy and Hold meant?
3) You agree that Facebook will be a stronger company if it invests in security.
Park aside everything you hear in the media, and ask yourself is Facebook going to be better off investing in security? If that's hard to answer, imagine your friend is a pretty good chef, and you invested in his popular restaurant with loyal patrons that rave about the restaurant to all their friends. Now, something goes wrong in the kitchen pipe, and it floods the dining room. Your chef friend closes the restaurant for a 2-day weekend to fix things up. Are you knocking on the door asking for your money back? If the answer is NO, replace your friend's restaurant with Facebook's stocks and the pipes-breaking incident with the data breach. Answer the question again!
4) You can live your life as usual without the money you invested in Facebook.
Seriously, if you have invested the money you need to live your life in the next few days, weeks, or months, you should stop everything, and go back to Investing 101. July 25th Facebook saga is precisely the kind of things that signify the need to separate your living expenses from investing stash. Don't be that guy/girl. Don't invest the money you need to live your life as is. Investing money is the stash you put aside to build the life as you wish, not as you live.
5) Facebook's Stock Card before and after July 25th hasn't changed.
At Stock Card and within our community, we take pride in mastering our emotions and staying true to the facts and logic. Compare these two images:
The one on the left is Facebook's Stock Card before July 25th (pre-saga), and the one on the right is the company's Stock Card after. Market growth, company strength, and past investment return have all remained untouched, all that has changed is the bottom-right box, and that one shows, the Facebook stock price has entered the undervalued range. If you look for bargains, how else did you think you can get a bargain deal?
Six companies that are shaping the future of data
The volume and speed of data generation are so high that you need to use measurement units that are hard to pronounce such as... GIGABYTE (that's not so hard), PETABYTE (Ok, that's a bit strange), EXABYTE (hmm) ... ZETTABYTE (You made your point! Way too many zeros)... The point is, as the volume of data generation grows astronomically, the demand for data storage grows with it. It's not only the data that's in our excel files or phones. It's our data footprint as we move around, and more importantly the data that the machines generate. That's every little sensor we are placing into everything we own, from our cars to our athletic clothing, to the digital dust we spread around in our manufacturing facilities... they are all getting connected, and sending bits and pieces of information back to the servers every nanosecond... and, they are just getting started...
That's why we cast our net wide for this edition of Stock Card Weekly to put together a watchlist of six companies that are most visited and discussed by our community as the companies that are shaping the future of data. Click on each logo to go to each company's Stock Card and learn about its operational strength and past investment return among other information you would need before investing.
Today, I want to share a watchlist with you. This is a watchlist of the companies that look like the big winners but haven't reached such status yet. They are typically between 1 to 5 billion dollars in size, well-managed and are in an organically growing market. But, due to their size, they are not of any worth for the financial media outlets and the Wall Street to talk about, as yet.
As we speak, there is an Amazon-lookalike somewhere. A small, well-managed, nifty company, with growing sales, free cash flow, and low debt that is building the future of eCommerce and benefits from the double-digit organic growth of the eCommerce market. We still don't know the company, but it is out there. Today's watchlist gives you a list of such companies that behave similar to Amazon and other big and buzz companies, but are yet to be discovered. Every year we run a search to find such companies, and today's Small and Nifty watchlist is a starting point so that you can come along with us on this journey.
Go to Stock Card's 'Investment Ideas' tab and take a look at 'Small N Nifty' portfolio. This is a free watchlist accessible to all Stock Card users to get inspired and find new companies whose shares have the potential to outperform the market average. Go ahead and find outperforming companies among the smallest and the niftiest of them all.
We looked at the list of the highest-grossing video game franchises with at least $1 billion revenue and created a portfolio of the publicly traded companies on the list that a U.S. investor has access to. On average you would have outperformed the market by 7.9 percent, had you invested in such companies on the first day of 2018.
Who would have thought that investing in having fun could pay off?
Go to Stock Card's 'Investment Ideas' tab and take a look at 'Invest In Fun' portfolio. This is a free portfolio accessible to all Stock Card users to get inspired and find new companies whose shares have the potential to outperform the market average. Go ahead and find fun in outperforming the market!
The 8 to 80 brands are what Howard Lindzon is interested in. These brands appeal to individuals from the age of 8 to 80, and you'd want to be invested in them to beat the average market. That's why a company like Netflix keeps growing. Whoever logs into Netflix can find something entertaining, hassle-free. Everyone can order something on Amazon, and in less than two days, a box shows up at the door. Love it or hate it, McDonald's name makes you salivate. That's the power of 8 to 80 brands.
Since 2016 when I started following his 8-80 mass appeal portfolio, he has dropped a few and added a handful of stocks, but he has held up to the most through the ups and downs of the market. Just remember, the buy/sell dates are based on when I see his 8-80 portfolio updates and don't necessarily match the exact time he added them to his portfolio but should be close.
The bottom line is, invest in well-run companies in growing markets and stick with them. It doesn't get easier than that. Intelligent investing is not difficult.
Dare to be great and don't accept the mediocrity of the market average, just like Howard.
Take a look at Howard's portfolio by clicking on the 'Investment Ideas' page, and if you have not subscribed to his daily newsletter, you should do so. I've been a reader of his work for years.