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IBDvalueinvestin (98.48)

Stocks at this point "Priced to Perfection"



May 03, 2012 – Comments (9) | RELATED TICKERS: GMCR.DL , NFLX , TPX

What does this mean priced to perfection?

It's a point where the stock prices have rallied ahead of future earnings, thus if a company says anything that points to slower growth (the stock price not only takes a hit but gets completely crushed).

Today's perfect example GMCR, but its not the only example. Previously NFLX, and TPX also got their shares bombed. This is a trend that is building and it will continue to find other stocks which will have their shares bombed as they fail to live up to the hype of their stock price.


A new trend has emerged and its not positive.

9 Comments – Post Your Own

#1) On May 03, 2012 at 12:39 PM, EnigmaDude (58.43) wrote:

This is not a new trend.  In 2 weeks FaceBook will do an IPO and we will see more stocks getting "priced to perfection"...

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#2) On May 03, 2012 at 12:52 PM, IBDvalueinvestin (98.48) wrote:

Facebook will cap the end of the "Dot bubble 2"

Any stocks that rally on Facebook IPO will be shorted heavily by hedge funds and that includes Facebook itself.

Hedge Funds are counting on Lemmings rushing into Social Media stocks so they could short them at absolute highs.

I think the Hedge Funds will get dissappointed because people are not as naive as they were back in Spring of 2000 but just in case they are the Hedge Funds are licking their chops at what could be easy money for them shorting or buying Puts or selling Calls.  

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#3) On May 03, 2012 at 1:42 PM, Valyooo (34.54) wrote:

You were pumping tpx two weeks ago, now youre saying it was priced to perfection?

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#4) On May 03, 2012 at 1:50 PM, IBDvalueinvestin (98.48) wrote:

I was not pumping TPX lol, I thought it would have a dead cat bounce, but when that failed it told me that its trend has reversed and it was priced to perfection.


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#5) On May 03, 2012 at 1:57 PM, IBDvalueinvestin (98.48) wrote:

Valyooo I don't go against what the market is telling me. If it says TPX was priced to perfection just like GMCR was then I believe it. But the market does not tell you that on a single day, its takes a week or two for it to show up on the chart.

You need examples to show you the trend and now we have 3 easily charted examples: TPX, NFLX, GMCR

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#6) On May 03, 2012 at 2:06 PM, IBDvalueinvestin (98.48) wrote:

Another big clue I have that stocks are priced to perfection is looking at the tiny premium options of Bear ETF's currently demand.

This means majority are focused on bullish options and whenever that has happened in the recent past its always reversed to the opposite side very quickly.

It happened in 2010 & 2011 and now there are signs the economy is slowing especially on retail #'s. That means no reason for 2012 not to follow 2010 & 2011 trend which was lower after May 1st.  

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#7) On May 03, 2012 at 3:07 PM, Frankydontfailme (28.79) wrote:

"Facebook will cap the end of the "Dot bubble 2"

I'm starting to suspect that this is too obvious... maybe it will start the beginning of the  "Dot bubble 2" .... or maybe it isn't a bubble at all.

But i agree with you that many stocks are priced for perfection.... that being said many stocks are underpriced... thoughts on rails and reits?

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#8) On May 03, 2012 at 3:27 PM, materialsman92 (38.48) wrote:

funny title +1

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#9) On May 04, 2012 at 1:46 PM, IBDvalueinvestin (98.48) wrote:

Today's Jobs numbers, the hammer misses the nail by a wide margin and now we have a black & blue thumb to show for it..

Stocks ran ahead of economic numbers, pricing them to perfection. The investors expected that the economy would keep on trucking at the speed it was racing at during Dec.-Feb. but March-April numbers are saying hold up people, we are not thru the woods yet and may go thru a dark tunnel before we see the  light again.

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