While the three formerly hottest companies on this planet Zynga Inc (ZNGA), Facebook Inc (FB) and Groupon Inc (GRPN) have lost investors hundreds of millions of dollars, believe it or not, you can still profit/gain from these…the profits just aren’t what you expect…
…because the gains come in the form of knowledge and experience as there are some GREAT lessons these stocks can teach us…and definitely read my post on the Facebook IPO warning people of the coming drop (actually nailed its current valuation too).
As you check out their horrific charts, guess what the 5 lessons are:
1. Respect the power of hype, but never believe it’s more powerful than basic technical analysis
2. Don’t try to catch falling knives, you’ll end up with bloody hands or worse, bloody account balances.
3. Social media-based business are actually shit, this is one of the many reasons why Twitter built their own stock market features rather than purchase a shady firm like Stocktwits…only use social media to enhance your business, not as a crutch, as I do as you can see from my Facebook fan page here and several private group pages I use for my trading challenge students and a new group specifically for my Vegas conference attendees.
4. The internet still is just a teenager, yesterday’s giants can easily become today’s midgets.
5. Even billionaires like Mark Cuban thought Facebook was a good buy in the $30s, George Soros liked it in the $20s…follow what Warren Buffett teaches instead to only partake in things you understand, which for me means focusing on more predictable patterns like these for trading and those detailed in my 7 free video lessons
Posted in Bad Trades, Basics
