Fads come and go.

Below is a list of some of the more popular/trendy/fad/meme stocks and favored gambling vehicles of the last couple years alongside their respective 52-week highs and current prices.

It’s important to understand what’s happening beneath the surface. A breakdown of internals can be an early indicator of a downtrend.

In fact, this morning I came across a stat that over one-third of NASDAQ stocks are down over 50% from their peaks!

You might not know it from looking at the headline indices but things continue to rot under the surface.

Fads come and go, but you know what never goes out of style?

Paying reasonable prices for a long-term stream of expected cash flows. This principle may get forgotten from time to time, but it will still be sound investment advice 100 years from now. 

When you buy a stock you’re buying a business… so analyze it accordingly. Is the business being offered at a reasonable price given realistic estimates of future sales, earnings and cash flows? Far too many people have skipped that step and gotten caught up in a mania of historical proportions.

Be honest with yourself, is the purchase reasonable and appropriate for your unique circumstances and financial goals or is it glorified gambling simply hoping for a quick flip to the next person at a higher price?

Past performance is no guarantee of future results. All investments maintain risk of loss in addition to gain.

Data from third-parties is believed to be reliable but accuracy is not guaranteed. Much of the data used to interpret the markets and forecast returns are often at odds with each other and can result in different conclusions. Many different factors impact prices including factors not mentioned here.

This is not investment advice but merely a general commentary. Individualized investment advice cannot be provided until a thorough review of your unique circumstances and financial goals is completed.

Views provided here are current only as of the moment of posting and are subject to change at any time without notification.

Print Friendly, PDF & Email