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This is not investment advice. It would be a bad idea, but that has nothing to do with Facebook specifically or recent news. Read a dozen of Matt Levine’s colu

This is not investment advice. It would be a bad idea, but that has nothing to do with Facebook specifically or recent news. Read a dozen of Matt Levine’s columns, starting with https://www.bloomberg.com/view/articles/2017-10-09/retail-voters-and-insider-traders https://www.bloomberg.com/view/articles/2017-10-09/retail-vo.... The gist: in 2018, an individual isn’t going to have any insight about a security that isn’t already priced in. Sorry. If this is a hobby, like buying a few lotto tickets, great, do whatever. Your question sounds like you’re seeking an investment thesis, though. If so, go with “I don’t know anything about any company that isn’t priced in, so I should own a diversified basket (which generally means mutual funds or ETFs, not specific equities other than maybe for tax-loss harvesting) that is essentially the entire market.”

cimmanom 9y ago
Yes and no. Market prices of securities these days are short term prices, especially with the amount of automated trading and day trading going on. The people with the funds to engage in arbitrage strategies are hoping to make a buck somewhere in the next second to next month. A long term (as in, decades-long outlook) buy-and-hold investor can still get deals when a stock hits a local low. But the risk is different: in 20 years, will Facebook be more like Microsoft is now? Or more like Enron? If you're confident it'll continue to grow steadily once the media cycle is over, buying while it's facing a short term scandal could be smart. Or the scandal could turn out to be more than a hiccup, and they could be out of business in a few years. Or they could just slowly fade to nothing over time. I strongly agree that a diversified portfolio is a better long term strategy than picking stocks. However, if you're already doing that and have a bit of money left over that you're not afraid to lose, there's no harm in placing a few more-specific bets. You just have to remember to treat them like bets and have enough self control not to gamble with the rent money.

cimmanom 9y ago

Yes and no. Market prices of securities these days are short term prices, especially with the amount of automated trading and day trading going on. The people with the funds to engage in arbitrage strategies are hoping to make a buck somewhere in the next second to next month. A long term (as in, decades-long outlook) buy-and-hold investor can still get deals when a stock hits a local low. But the risk is different: in 20 years, will Facebook be more like Microsoft is now? Or more like Enron? If you're confident it'll continue to grow steadily once the media cycle is over, buying while it's facing a short term scandal could be smart. Or the scandal could turn out to be more than a hiccup, and they could be out of business in a few years. Or they could just slowly fade to nothing over time. I strongly agree that a diversified portfolio is a better long term strategy than picking stocks. However, if you're already doing that and have a bit of money left over that you're not afraid to lose, there's no harm in placing a few more-specific bets. You just have to remember to treat them like bets and have enough self control not to gamble with the rent money.