Friends
Despite the continued disappointment in the Facebook IPO (more about that in a moment) stocks staged their first real rally in weeks. On a technical basis we have been in an oversold situation for days, so a little bounce here is not a real surprise, but it is nice to finally get a positive day after experiencing the worst week of the year last week. At the close, the Dow Jones Industrial Average was up 135 points to close at 12,504. The S&P 500 was up more than 20 points to finish the day at 1315. Gold was up about $1 to trade at $1593 per ounce and oil was up $1.47 to finish the day trading at $92.45.
Back to Facebook (and then we’ll leave it alone) for a moment. We were not aware Friday morning that retail investors were actually allotted many more shares than anyone had anticipated. As I told you last week, when a deal is “hot” the institutions want all the shares and the little guy is left wanting. When all of a sudden there are more shares for the little guy than had been expected, then, as we used to say, “if I can get some shares, I don’t want it”. Or as Groucho Marx said in a letter to the Friars Club of Beverly Hills – ” I don’t want to belong to any club that will accept people like me as a member”. After moving money away from Apple to make room for Facebook shares, traders decided that they would rather go back to owning the powerhouse tech giant’s shares and bid Apple up 30 points today. Facebook fell over 4 points or more than 10%. Ok, I am done flogging Facebook. It may turn out to be a wonderful stock someday and is already a wonderful company, but hype is something all investors should be aware of.
Have a nice evening everyone.
