"We have a long way to go, but we are very happy with the quarter," Hastings said in an interview Wednesday. That quote may be the biggest clue yet as to how overpriced and overvalued NFLX shares truly are. It's like counting your chickens before they hatch!
When the giddy euphoria and celebration cools down, my guess is that a big shorting effort on NFLX shares will commence. Then shares will go down low enough that the Relative Strength Indicator will signal that shares are oversold, and as sure as clock work, investors will drive the stock back up again.
My best suggestion is to stand aside if you don't already own shares of NFLX until the stock drops back down to earth. Let the share price bring the forward PE ratio down to a "modest" 44 times earnings and perhaps you'll be able to buy shares for $75 or less.
Be a rational, logical and patient investor. Chances are if you're prudent you'll come out ahead in the long run without having to take wild-eyed risks. Spend your efforts evaluating oversold companies like Apple, and do your research to find the next Netflix opportunity before it blasts off into outer space.At the time of publication the author had a position in AAPL and is waiting for the price to come down on NFLX before buying. Follow @m8a2r1 This article was written by an independent contributor, separate from TheStreet's regular news coverage. Jim Cramer's protege Dave Peltier finds you Stocks Under $10 picks with explosive upside potential. See what he's trading today with a 14-day FREE pass.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV