What a great day in the markets for traders and investors that were long. The Dow Jones Industrial Average tacks on almost 200 points and gets back over 13,000 with a hundred points to spare. Monsters stocks springing back to life all over the place. You know the ones where the earnings growth and price action were this year $AAPL $CMG and $PCLN. Monster stocks with a competitive edge in branding, quality, customer base, and that really have an edge in innovation and customer satisfaction.
But in all the excitement in watching the green up arrows today many traders might have missed some big red arrows down today on what I call Junk Stocks these stocks really have no edge, their businesses can be easily duplicated, and the biggest issue I have is they have never even made profits! These stocks are all about hope, the future, the innovation, eyeballs online on their web sites, their customer base and all the other BS that the founders sold to under writers and investors to enable the company to go public and make them multimillionaires. There is an Internet 2.0 market bubble forming and the Google of this decade will go Public in a manner of weeks facebook $FB. But do not be fooled by the junk the real stocks like $AAPL and $FB is where real money is flowing, not hope but cash.
Here are the four junk stocks to keep on your watch list for shorting opportunities when the bottom truly falls out. Today was the first sign that smart money is really not interested in unprofitable companies when so many are making so much money.
$YELP >Yelp
$ZNGA >Zynga
$GRPN >Groupon
$P >Pandora
Junk stocks that are cheap tend to get cheaper becasue they run out of suckers, oops, I mean buyers.
