With much fanfare and anticipation, Facebook recently went public. And the public was there fully participating in the extravaganza. The brokerage house of TD Ameritrade announced that approximately a fourth of its total trading on "Facebook Friday" consisted of individuals buying and selling Facebook stock. One fourth of total trading. Nearly 600 million shares of Facebook stock were traded that first day. Although much of the commentary since that fateful Friday has been to bemoan the decline in the stock of the newly public company, the interesting story to me is how so many individual "investors" could be so captivated with the idea of a hot company, and a hot stock, that they lost sense of what the investing is supposed to be about.
David A. Pace, CFA
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