NEW YORK (TheStreet) -- Of all the companies I follow, there has never been one more misunderstood than Pandora (P - Get Report). When I was bullish Pandora, I had to distance my take from bullish, yet very different arguments. Now that I'm bearish, I often do the same.
You must ensure the reasons you're bullish or bearish make sense in support of whatever conclusions you come to. Check yourself. Because, if you don't and your reasons might not logically lead to your conclusion. Worse yet you could be merely co-opting consensus arguments to support your preconceived and desired outcome. This can make for particularly risky investing. Sometimes you'll be wrong and end up right anyway. But that's not a good habit to fall into.
Case in point -- an article published by TheStreet contributor David Meyers last Friday, Pandora's Got Static, Lost 53% in 6 Months.
In the article, Meyers (rightfully) gloats about being on the right side of Pandora stock. He laments moderating growth (which shouldn't come as a surprise; I've been telling you for years that growth would moderate at Pandora). Meyers goes on to make a statement that shows a misunderstanding of Pandora's core business model:
Ironically, Pandora boasted more listener hours this quarter. I fail to see the relevance in this. If the company doesn't have more listeners, it simply means old listeners are listening longer. I fail to see how that is at all beneficial in the long run. Maybe Pandora can squeeze in a few more commercials but that is not sustainable growth ( bold emphasis added).
That's like saying I can't get into Kate Upton because she's a redhead. There's just no legitimate nexus between the point Meyers made and his Pandora bearishness.
Investing and life lesson 101: If you "fail to see" something ask yourself why multiple times. Put yourself through the reflective and introspective ringer.
In this case, what Meyers fails to "see" are the basics of Pandora's primary business model.
09/08/14 - 08:30 AM EDT
09/06/14 - 08:00 AM EDT
09/05/14 - 08:19 AM EDT
09/04/14 - 08:44 AM EDT
09/02/14 - 08:50 AM EDT
02/11/16 - 08:44 AM EST
02/08/16 - 17:25 PM EST
02/08/16 - 15:53 PM EST
02/08/16 - 01:00 AM EST
02/08/16 - 01:00 AM EST
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
Trifecta Stocks analyzes over 4,000 equities weekly to find the elite 1% of stocks that pass rigorous quantitative, fundamental and technical tests.
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
Chris Versace, using sophisticated stock screening and fundamental research, identifies potentially explosive small and mid-cap stocks.
Master swing trader Alan Farley uses his sophisticated software screens to review thousands of stocks each day for you, to find just the handful that meet his demanding criteria.