I am not a perma-bull, nor have I ever been accused of being a Pollyanna. What I am is a realist. I look at situations and try to size up the odds that something is going substantially lower or higher. I place my bets accordingly. That's about it. I don't have an axe to grind about whether something should have been priced at some other level, or that the market owes me something because I paid too much for a stock or an exchange-traded fund. What I want to do is to make a profit on my trades so that, overall, my accounts are profitable, and, hopefully, ahead of the averages.
That brings me to the Facebook (FB) debacle, or as it may come to be known, the social greed fiasco. Here is a stock that was apparently overpriced in the initial public offering, when so many knuckleheads were lining up to get a taste of the easy profits. That didn't work out so well for them. Since then, as the stock has plummeted, there has been a deafening chorus of how this thing is still so dreadfully overpriced and how much lower it should go. Lots of talk about the stock heading for single digits. This talk, of course, reached a crescendo as it broke to new lows last week below the $26 level. Naturally, that was the perfect time to buy. Since last week's low of $25.52, the stock has rebounded 10% to the $28.07 level. That's not enough of a bounce for you? Then you should be in another line of work. The July $25 puts, which some folks ridiculed me for writing in the $0.80-$1.20 range on the way down, have collapsed 50% from their highs of $1.90....422 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.
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