Meanwhile, expectations for Facebook have been huge. Despite a 24% pullback since late January, shares still trade at seven times 2014 consensus revenue estimates, and this is still a $60 billion market-cap company.

Now, there's no question that this is not a fly-by-night business with no prospects. There's $9.5 billion in cash and short-term investments on the books, and the company has delivered some solid margins. But high expectations and the inability to deliver the lofty growth expected by investors are the reasons that the stock is down 45% from its all-time high the very first day it traded, May 12, 2012.

Take the ugliest looking company, the "dog with fleas" of which little is expected. Compare it to the latest Wall Street growth darling. If the former can show some signs of life, a turnaround of sorts, its share price is somewhat likely to prosper. If the latter, with built-in high expectations can't deliver, watch out. That's why I'd still rather own Gannett than Facebook.

High, unachievable expectations can be dangerous to the wallets of unsuspecting investors. A company's products may seem cutting edge, but there's often a disconnect between price and value. On the flip side, "dogs with fleas" don't always turn around, but I'll save the "value trap" discussion for another day.

At the time of publication the author held no positions in any of the stocks mentioned.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.
At the time of publication, Heller was long XXXX.

Jonathan Heller, CFA, is president of KEJ Financial Advisors, his fee-only financial planning company. Jon spent 17 years at Bloomberg Financial Markets in various roles, from 1989 until 2005. He ran Bloomberg's Equity Fundamental Research Department from 1994 until 1998, when he assumed responsibility for Bloomberg's Equity Data Research Department. In 2001, he joined Bloomberg's Publishing group as senior markets editor and writer for Bloomberg Personal Finance Magazine, and an associate editor and contributor for Bloomberg Markets Magazine. In 2005, he joined SEI Investments as director of investment communications within SEI's Investment Management Unit.

Jon is also the founder of the Cheap Stocks Web site, a site dedicated to deep-value investing. He has an undergraduate degree from Grove City College and an MBA from Rider University, where he has also served on the adjunct faculty; he is also a CFA charter holder.

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