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

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.