Friday, May 18, 2012

Buying Puts on Facebook?

Facebook shares hit the market today.  The IPO fared worse than expected.  I was hoping it would run up big until the stock was ready for the options market in a week or so.  Then I was planning to buy some puts (probably leaps) and wait.

Legendary investor Peter Lynch advised investors to pay attention to the products and services we know something about.  I know my son and his friends have abandoned facebook for twitter.  If the cool teens in high school and college are gone, the company will never earn the kind of cash that it will take to support the absurd P/E is sports now.

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