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My next guest says one of the biggest mistakes and individual investor can make is basing their market decisions on economic headlines Matt McCall is the CEO of -- financial group -- welcome back.
Look here's what I don't understand.
Okay the economy is not good right now 2.2 percent growth unemployment still over 8%.
Things do not look good and yet here both the stock market except for today and the Dow up ten points.
-- this stock market has been doing quite.
Yeah we did the Dow down ten points they basically unchanged.
Yes we begin in May click the best level we seen in several years on Dow Jones Industrial Average so.
Warriors -- warrior hi -- -- look at.
-- you if you think that the paper any paper I don't care what people looking at look at the headlines you'd think things are terribly think the market these bases hitting multi year lows.
The same time investors have been steered away from investing in stock market.
And a market's been going up and hitting new highs why.
Well if you take a look at.
You don't typically invest from what the economy's doing I know that's something that you -- the makes little if any professional and a special that says yes the average American Media that -- fortunately.
The average American -- he struggles to beat the market or keep up with the market returns.
When you invest in the market or in a stock -- typically look for a stock that is.
Making more money every year -- makes makes perfect sense -- more money they make the higher the stock price should -- Companies are actually doing pretty darn well Arabia are better earnings per share you're looking this year the adjustments that I just looked up recently just this morning.
10% earnings per share growth in 2012 looking for another 12% 2013.
We look if we just based what companies are making 2012.
On the average.
S&P five actually sitting at an all time high if it's based on a valuation that average has been the last ten years so -- -- let's look good when you look at those numbers.
When you look at that.
A lot of these companies on the Dow -- the companies on the S&P 500 these are global companies yes so they're getting their profits not just from this country -- getting their profits from all over the world so.
It stands to reason that they might look a little better than than our economy and there's that old saying to -- that stocks climb a wall of worry.
That I -- you can't -- better I mean when when I had my third saying.
The economy's booming you know I think 20992000.
What -- the headlines.
-- -- we're in the most robust economy we've ever had the tech -- What happened a few months later what the -- fullbacks we've ever seen -- stock market as soon as things got good.
At -- essential easiest sounds so simple when the headlines at this time -- so.
But didn't -- take that contrarian view it works out majority of.
Time what's -- about.
FaceBook for a second because I'm wondering if that's taking us back to that tech them.
I look at that company closely you know what I think I think maybe -- a little late to the party.
Revenues are going down a lot of people are saying -- in the next with -- of the next -- you have up your sleeve because if you're selling advertising.
The people who use your website are going to be well when I look at FaceBook I'm not a huge fan of it obviously you know they've -- -- the you know several hundred billion or 100 billion dollars or may be.
I meet I used FaceBook I love -- I connect the people at night you know FaceBook different things earlier billion dollar company no I don't understand -- -- revenues coming from where other future is.
And is you're not crossing a barrier of entry there can always be somebody asked her MySpace back in the day that was a great company then came along FaceBook.
And of any of Twitter of other ways really.
I have work life of like three years and FaceBook is already well down that right okay that's my view service but they're they're going on there out there soon to be going on their fund -- tour they go out may eighteenth.
Should individual investors even think about this obviously you can't get into.
That you know that the bid the shares it really make you money you've got to get it down a road hours days weeks.
After the pros -- -- probably is in the individual that's just sitting out there's not invest in the face but yet the only time to get by those after begins trading on your stock exchange after it goes public.
A single public whether that's a difference between the shared over that fifty dollars a share the last thing that you want to do -- Has -- buying FaceBook on the first day goes public sure it may be a little -- the day later maybe hire a week later.
But his bag it devaluation be so darn high and we've seen is -- the other -- -- -- that have gone public recently Zynga up pandora Linkedin.
All open very high what happened in the last of the weeks after -- public.
They fell dramatically so you have to be patient you really -- -- -- FaceBook if you're not -- lucky bastard got dinner ready.
You know what use FaceBook enjoy it when you're not make money off in the stock market.
Word to the wise if you're listing to -- callers after -- thank you for coming thanks great job of selling its.
Are we'll be right back with my two cents more in the answer to our question of the day should big --
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