Zacks Investment Ideas feature highlights: Apple and Zillow
CHICAGO, April 26, 2013
CHICAGO, April 26, 2013 /PRNewswire/ --Today, Zacks Investment Ideas feature
highlights Features: Apple (Nasdaq:AAPL) and Zillow (Nasdaq:Z).
Lessons from the Twitter Crash
On Tuesday, April 23 the markets plunged after the Associated Press twitter
account was hacked and published a tweet that two bombs had exploded in the
White House and Barack Obama was injured. The Dow Jones Industrial average
plunged 150 points in only a few seconds, but quickly recovered.
What was action was swift, as traders quickly sold stocks and then bought them
right back ... making the clear cut winners the brokerages that generated a
few more commission dollars.
The losers are even easier to find. They are going to be the small time
investors. Mom and Pop. How did they lose out? Well they are more likely to
use stops and while they agreed to sell the stock or ETF if it went below a
certain price, they lost out. This is probably the most important lesson
regarding stops since the big flash crash of May 6, 2010.
Maybe Not So Much
I know it's hard to really say they were the same thing, and the damage of the
real flash crash was so much more than the Twitter hack job. But there are
lessons that can be learned here and the use of stops as a "hedge" is the
number one lesson.
If you want to hedge a long position you hold, you need to use options. They
are complicated, but a broker can walk you through a solid strategy on how to
protect yourself without being exposed to the flash crash that will come again
in the future.
In the big event, holders of Apple (Nasdaq:AAPL) got smoked if they put a
stock in far out of the market. This time, the damage didn't take as big a
bite out of the big red fruit. The four point drop in AAPL the other day
doesn't compare to the 50 point drop of the flash crash, but it's a drop
Twitter Is The New Tape
If there was any doubt about it in the past, we can put the idea of traders
not being on Twitter to rest. The source of the rumor was Twitter and the
traders acted after the tweet came out. In a shoot first, ask questions later
world the traders went for the kill and some got killed.
Twitter is becoming the source that investors look to first for the
dissemination of news. Breaking news is like heroin for traders and the source
that is the fastest is the best. For most, that means a twitter account with
multiple lists of news providers and other resources.
Conference Call Questions Via Twitter
The adoption of Twitter is nearly complete. Late last night I learned that
Zillow (Nasdaq:Z) would be taking questions for management on the earnings
conference call via Twitter. Talk about being ahead of the curve and leading
the market! A move like this is bound to only bring more attention to the real
estate information resource.
It seems like it will only be a matter of time before all companies are using
Twitter to take questions.
The take away from this idea is that Twitter is not going away. It is only
going to expand from here. Expect Wall Street to continue to rely on it.
In God We Trust, All Others Not So Much
The final and most import lesson from this investment idea is that Twitter can
be hacked. Lies can be told. Misinformation can abound.
You knew that already, but the idea is that you have to be responsible for
yourself and do your own homework. Sure you can follow the Penny Stock King
and make the big money he or she promises, but you can also lose the big money
just the same.
Verification on Twitter may tell you that the account of @BillClinton is
really the former president... but he just joined last night and all the other
Bill Clinton's on there were fake. I mean all but the one account that Stephen
Colbert created for the former President.
Zacks.com is a property of Zacks Investment Research, Inc., which was formed
in 1978 by Len Zacks. The company continually processes stock reports issued
by 3,000 analysts from 150 brokerage firms. It monitors more than 200,000
earnings estimates, looking for changes.
Then when changes are discovered, they're applied to help assign more than
4,400 stocks into five Zacks Rank categories: #1 Strong Buy, #2 Buy, #3 Hold,
#4 Sell, and #5 Strong Sell. This proprietary stock picking system; the Zacks
Rank, continues to outperform the market by nearly a 3 to 1 margin. The best
way to unlock the profitable stock recommendations and market insights of
Zacks Investment Research is through our free daily email newsletter Profit
from the Pros. In short, it's your steady flow of profitable ideas GUARANTEED
to be worth your time. Get your free subscription to Profit from the Pros
Follow us on Twitter: http://twitter.com/ZacksResearch
Join us on Facebook: http://www.facebook.com/ZacksInvestmentResearch
Zacks Investment Research is under common control with affiliated entities
(including a broker-dealer and an investment adviser), which may engage in
transactions involving the foregoing securities for the clients of such
Disclaimer: Past performance does not guarantee future results. Investors
should always research companies and securities before making any investments.
Nothing herein should be construed as an offer or solicitation to buy or sell
Zacks Investment Research
800-767-3771 ext. 9339
SOURCE Zacks Investment Research, Inc.
Press spacebar to pause and continue. Press esc to stop.