- why the current market is not that bad; and
- the bull and bear cases for Facebook.
The Market's Not that Nasty Posted at 7:01 p.m. EST on Thursday, Jan. 31 All day today I wanted to be bearish. I read Doug's columns and I found them very persuasive. Plus, I can't say I am crazy about a setup based on various short squeezes all over the place like the ones in the cloud and the ones in semiconductors, although they sure passed by Broadcom ( BRCM). But I keep coming back to how broad-based this whole rally is. I keep thinking, like my friend and colleague at TheStreet Matt Horween, that we may be just forming a gigantic, well-rounded base. As he just pointed out to me, we have not really surged if you look at a long-term monthly chart. Plus it is not like we are seeing froth all over the place. They aren't running up bogus biotech or small-cap semiconductors or device stocks that don't make sense. Instead these are mostly backing-and-filling advances with pockets of selling that are quickly met with buyers, although usually not as fast as Facebook ( FB) was today. To me the buy-on-a-pullback view is something that people espouse, but don't really do. I heard lots of people talking about buying Facebook and Blackberry (still Research In Motion ( RIMM) at the moment) on pullbacks, but when they get them they want more of a pullback. You just aren't getting that "more of a pullback" that would make it so easy to join the advance. To me, the best way to look at this market is with the stocks of the companies I had on "Mad Money." We got a sell on KeyCorp ( KEY) from Bernstein today and the stock barely got hit and then came back and next thing you know I am listening to the CEO and I am thinking "How could a guy put a sell on a stock this cheap?"
For Facebook, It's All in the Eye of the Beholder Posted at 11:41 a.m. EST on Thursday, Jan. 31 Facebook's ( FB) great. Facebook's horrible. Facebook's cheap. Facebook's expensive. Facebook's growing like a weed. Facebook's growth is already slowing. Which is true? How could there really be such extremes in sentiment here? Believe me when I say I am only hearing extremes, as there seems to be no middle ground at all with this stock. The answer? It's all in the eye of the beholder. People are seeing what they want to see in Facebook. Let me give you the bear case, which puts you in the head of the sellers. Then I'll give you the bull case, which allows you to understand it from the perspective of the buyers. It's the only way, frankly, to explain the stock's wild ping-pong game: First it'll hang in, even after a huge rally, then it'll give up the ghost before it settles in where it was a fortnight ago -- before the big price spike.