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I also promised you a look at one great trade in particular involving a current social media darling. Today I'd like to keep that promise.
If you've been with me for a while, you already know I don't like social media stocks. They're not hooked into our unstoppable trends (nope, not even Technology). Their products are "nice to have" instead of "need to have." And most of them have no real way to make money.
But that's the thing about tactics.
If you have the right trading tactics, you can squeeze profit out of any stock. Even ones you don't like.
In this case, I think betting on one stock's failure may be far more profitable than betting on its success.
I know that this may seem un-American or somehow unethical, but shorting a stock – that is, betting on its decline – is a killer tactic and can be a fabulously profitable tactic used to build your wealth.
Here's the thinking and here's why #ShortingTwitter is the only social media play I like right now…
As I noted in last Thursday's column, the Put/Call Ratio has warned of the potential for a pullback or reversal for weeks.
For more conservative investors, it's a sign that you should be tightening up your protective stops to harvest gains and control risk.
For more aggressive investors or traders, it's a sign that you want to hunt down the weakest companies you can find. That's because they'll be the first to hit the skids when the trash gets taken out.I first named Twitter Inc. (NYSE: TWTR) in my Money Map Report 2014 Outlook last January as ripe for a fall under similar circumstances. So far that trade has returned 44.64% and counting.
Then, a few weeks ago when the Put/Call Ratio reached another extreme, I reiterated the trade for my Strike Force subscribers. So far the returns are 16.13% and 148.06% for those who shorted the stock and those who purchased put options as directed, respectively.
For the social media cognoscenti, what I am suggesting is akin to heresy, but sometimes the most profitable opportunities are.
About the Author
Keith is a seasoned market analyst and professional trader with more than 37 years of global experience. He is one of very few experts to correctly see both the dot.bomb crisis and the ongoing financial crisis coming ahead of time - and one of even fewer to help millions of investors around the world successfully navigate them both. Forbes hailed him as a "Market Visionary." He is a regular on FOX Business News and Yahoo! Finance, and his observations have been featured in Bloomberg, The Wall Street Journal, WIRED, and MarketWatch. Keith previously led The Money Map Report, Money Map's flagship newsletter, as Chief Investment Strategist, from 20007 to 2020. Keith holds a BS in management and finance from Skidmore College and an MS in international finance (with a focus on Japanese business science) from Chaminade University. He regularly travels the world in search of investment opportunities others don't yet see or understand.