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Disappointments? Think Opportunities

Posted at 3:43 p.m. EST on Thursday, April 24, 2014

What's the matter with Facebook  (FB)? Wasn't it the world's greatest quarter? Didn't it totally deliver on every metric? Doesn't it have accelerating revenue growth, increasing user engagement and the ultimate in worldwide reach?

[Read: Microsoft's 'Blowout Quarter' Proved Nothing]

Yes, it has all of that and much more. But here's what Facebook did best on the call: underpromise about the future. These guys basically spent a huge part of the call telling you that things are going to slow, that they aren't going to monetize things that we thought were about to be monetized and that in the end they are now just a company with really fast growth in earnings. This market doesn't just want really good earnings growth any more. It wants a dividend. It wants a buyback. It wants financial discipline. It doesn't want a company spending like a drunken sailor even as I get the sense that the sailor's really at the top of his game.

So the stock after opening strong didn't rally; it sold off.

Here's the rub. Unlike a lot of the stocks that have sold off because they are just a multiple of sales, not earnings, Facebook is actually an inexpensive stock. I don't know what's going to happen Friday with the stock. I do know that companies with tons of opportunities and great growth do reward their shareholders. I think this is an opportunity, not a disappointment.

I feel the same way about American Airlines Group (AAL). This $27 billion company, which has $10 billion in cash, reported magnificent sales and earnings Thursday morning. I can't believe how much money it made. It seemed like an aberration. And you know what? It was. It was aberrantly low because of all of the cancelled flights. Who knows what it can earn now that the skies are friendly. But it had the misfortune to report on the same day at United Continental (UAL) and that was the one airline, the only airline, that truly has delivered a nightmare number. It obliterated the glory of American. If the company had reported Wednesday, it probably would be through $40 instead of being "stuck" at $38.

[Read: Making Sense of the Crash in Amazon Stock]

Finally, there are two others that I am not giving up on even though the market sure has: Xilinx (XLNX) and Celgene (CELG). These two stocks, both owned by my charitable trust, were obliterated Thursday and I am not happy. It's always nasty when you own a big loser. They make you feel like a loser. That's me -- a real loser because the trust owns these. Hey, I talk about the winners, bring on the losers.

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