I'm not sure if anyone is noticing the pop in Priceline's (
PCLN
) stock this morning, up $50 following the company's earnings
beat.
Priceline does not pay a dividend at this time, but I wanted to
focus on the manic way investors tend to look at momentum stocks
and why long-term investors need to keep exposure to these plays at
a smaller part of one's portfolio, if there is an aversion to
taking on higher risk. The last time Priceline reported their
results the stock ended up getting clocked by $30, taking the stock
down below $200 a share. All of a sudden the company gets it all
right this quarter and we see it up $50. Unless you possess a
trader's edge and discipline to move in and out of stocks like this
in a timely manner, there is little reason to stake your long-term
dollars on stocks momentum traders bring loads of volatility to.
Now, we will on occasion have a situation with a dividend stock,
where things could blow up of course, but for the most part,
traders are not playing the earnings game with the Johnson &
Johnsons (
JNJ
) and Coca-Colas (
KO
) of the world.
Speaking of long-term dollars, there is a lot of chatter about
Americans beginning to maybe save too much these days. Ignore all
that nonsensical noise you hear and continue to put some of your
hard-earned dollars away for your retirement. Don't end up like
many who are set to rely on just one source of retirement income,
which for a good majority will be Social Security.
Getting back to today's market, Barnes & Noble (
BKS
) popped on news the company is exploring a sale. The stock
recently approached all-time lows as the company misplayed an
opportunity years ago to acquire Amazon.com (
AMZN
). Don't be tempted by BKS' nearly 8% dividend yield - that payout
is certainly not sustainable, and we expect a dividend cut in the
near future. The market clearly sees little upside for the book
retailing market, thus the long-term fall in shares. Look no
further than Blockbuster ignoring the changing market, allowing
Netflix (
NFLX
) to come in and basically put the company in the huge bind they
are in today. Elsewhere, shares of Polo Ralph Lauren (
RL
) , Agrium (
AGU
) , and Anadarko Petroleum (
APC
) rallied following those companies' reports. Pitney Bowes (
PBI
) went the other way after the company missed earnings estimates
and guided lower. Despite another up day today, volume can not seem
to break out and it remains a real mystery.
Be sure to visit our complete recommended list of the
Best Dividend Stocks
, as well as a detailed explanation of
our ratings system here
.