Looking for a 25% gain? Here’s your trade on Weibo (WB). (June 21, 2017)
WB XMX
I want to look at Weibo ( NASDAQ:WB ) today. Chinese social networking platform company. We like that, we really like this pattern too. First of all with respect to the stock or the company, really strong growth, fundamentals are not value, it is growth.
This morning I had CNBC on and I saw a couple of money mangers who were largely forgetful, talking about how the theme should be growth over value. Growth is in favor over value stocks. And I was thinking to myself as somebody who doesn’t manage other peoples money I just manage my own, which is the money I care the most about, and I thought, “When would value be preferred over growth?” Value stocks by definition are really, really cheap. And stocks that are really, really cheap by definition aren’t because they are moving higher in price. If they are moving higher in price it is because they are growing or there is a short squeeze or something like that.
What I am saying is, you want to be long stocks of growing companies. If they are not growing, why the heck do you want to own them? Think about it this way, would you buy a business if you were a venture capitalist and you are looking to buy a business, would you buy a business that makes telephones for landlines? No, not a growing business. Would you buy a newspaper? Well, no, not a growing business. Would you buy a Chinese social networking platform? Well, yes, that is a growing business. The challenge that I would have is, I don’t speak Chinese so I don’t have any idea how I could talk to the folks over there that are managing it.
The bottom line is this: I think this is a company that is growing. I think it is a stock that works. I think this is a BEAUTIFUL pattern here. That is why I chose to feature it in the stock of the day, I want to help you make some money. This stock is trading between 70.00 and $80.00. If the stock breaks out above $80.00 this is a stock that you want to own. For one reason, because it is probably going to 100.00 pretty quick. That is a 25 percent gain. So you can wait for three more dollars to take this stock. When it breaks above 80.00, I think you buy this stock. Ask me when it breaks 100.00 what you are supposed to do with it. But growth over value any day of the week, and tomorrow is a day of the week.
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