2 Stocks I Am Buying While Others Are Afraid

NEW YORK ( TheStreet) -- Sometimes all I can do is sigh, step outside and breath in the cool "June Gloom" Santa Monica air.

It boggles my mind -- people who have lived in Southern California their entire lives appear confused when it gets cloudy in LA in June. Have a look west at that thing called the Pacific Ocean and do some basic meteorological research. In less than five minutes, you'll see that "June Gloom" is actually a typical and easily explainable annual weather pattern.

I love it. In fact, if I could, I would put all my money on the sun in June, as I wait for the inevitable rebound come July. Never short the sun in Southern California.

Some investors (not you) are a lot like dumb blondes. The same thing happens repeatedly and they continue to react the same way every time. They learn nothing from history. They lack the capacity to critically consider the way things -- be it the weather or stocks -- tend to ebb and flow.

If you follow the stock market at all, you see this psychological phenomenon at play on a daily basis.

Pandora

Case in point: Tuesday morning, my Briefing.com feed warns me that Richard Greenfield of BTIG Media thinks Pandora ( P) investors "should be concerned" because the social streaming music app Songza "explodes to top of iOS charts." That almost sounds ominous.

Songza did indeed pop to No. 2 on the iOS free apps chart. Should Pandora, at No. 22, be concerned that it also trails Hide the Fart and Are You Smarter Than a 5th Grader?. But wait, here's a more logical comparison: Maybe investors in #30 Facebook ( FB) should freak out because the social network trails No. 29 Twitter.

Now, make note, this data is as of Tuesday morning. Monitor those charts and, yes, you can be an alarmist professional stock analyst just like Richard Greenfield! The rankings change constantly.

The Songza app became available on iPad the other day (it was originally only available for iPhone) and it popped. If you follow those charts, you can find a cause for "concern" almost daily.

Greenfield's analysis is as absurd as it is thin and meaningless. It would be like me pointing to the disparity in the number of reviews users have written for the Pandora app (633,606) vs. the Songza platform (4,747). That's just another piece of out-of-context tripe.

Greenfield would then point to the fact that Songza has a higher review rating than Pandora (more tripe, but he actually included it in his analysis).

The ax Greenfield wields at Pandora makes his bearishness appear personal.

In the same report, he notes that Apple's ( AAPL) integration of Siri into the car levels "the playing field for music applications..." He goes on to snark:
While Pandora issues one or more press releases a week talking about their car integration, Apple enabling Siri in your car means voice commands will enable easy navigation of your smart phone apps (Songza, Spotify, Rdio, Pandora, etc), eliminating Pandora's current integration advantage.

"One or more press releases a week..." Interesting. You do not need credentials to access Pandora's Investor Relations Web site. How about one or two a month that discuss in-car integration.

And exactly how does the Siri development "eliminate Pandora's current integration advantage"? Did satellite radio "eliminate" terrestrial radio's integration advantage? Did Pandora eliminate satellite radio's integration advantage? Of course not. The sky is not falling.

Integration is more about brand building and less about access. Certainly access matters, but if there's a will, there's a way to take what you want to hear with you -- with or without Siri and with or without integration. This is 2012.

Simply stated, this is how business, particularly in the tech/Internet/new media space rolls. It does not stand still.

We're in the middle of an exciting time period. Entrepreneurs from across the globe are creating, reinventing, tinkering and disrupting. It's a beautiful time.

Spotify is fantastic. Songza is as well. I would guess that the founders of each of those companies have deep respect for one another. And they realize some will win, some will lose, some will join forces and more than a few will coexist.

It's too bad analysts such as Greenfield do not have more respect for the intellectual capacity of the people who consume their "notes." This is not the first time he has urged concern with respect to Pandora. At some point, it becomes less about the actual merits of a business model or a stock and more about whether or not an analyst can make him or herself look good and ultimately correct.

I'm not sure if Songza or anybody else for that matter will take the crown of Internet radio pioneer away from Pandora. But I am certainly not concerned. I did not invest in Pandora because of what everybody else does. I invested in Pandora -- and bought more on Tuesday's weakness -- because of Pandora's long-term story. Songza did not just blow it to bits.

That's really the key. Are you a long-term investor? If so, define long-term. You might define it differently than I do. I measure it in years, not months or weeks. As such, I actually appreciate guys like Greenfield. They help provide the dips that I can buy on.

Zynga

Zynga ( ZNGA) experienced an even steeper decline than Pandora on Tuesday. It was down for a similar reason. The latest numbers show a decline in the number of people using the company's games.

The problem, or so the story goes, is that with Facebook's users migrating rapidly to mobile, Zynga loses because you can play its games on the FB mobile app.

Now, there's no question that the Facebook mobile app stinks. And there's also no doubt the Zynga hitched its load to Facebook big time. The company's CEO, Mark Pincus, admitted (and explained) this just the other day at the All Things D conference. If you listened closely, you realize that Pincus sees a way forward.

Zynga will make the mobile transition just like so many other companies in its class. Don't bet against guys like Pincus. Chances are they're smarter than you (not you!).

For one reason or another, investors want everything to happen now, in a straight line and without any hint whatsoever of complexity. If it was only that easy. I have to give investors more credit than that though; traders probably account for a good chunk of these types of moves down. Stop losses likely play a key role as well.

In any event, just like I bought more Pandora, I bought more Zynga. I'm not afraid, but, more importantly, I am not short-sighted.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.
At the time of publication, the author was long FB, P and ZNGA.

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