Here’s Why You Ignore Headlines!

facebook earnings

Over the last 6 months, Facebook (NASDAQ: FB) declined over 43% from its peak to its 52-week low.

Part of the reason was the rash of negative press the company was receiving – and rightfully so.

They sold data, and found numerous ways to collect as much personal information from their users as possible.  The Cambridge Analytica scandal prompted Mark Zuckerberg to have to sit in front of Congress and answer some tough questions.

Then there was the #deleteFacebook campaign, in which users were supposedly taking a hiatus from Facebook or simply deleting the app.

Every headline regarding Facebook was negative, and it appeared the company was spiraling downward.

Then, when the company reported earnings on January 31st, a funny thing happened…

Facebook grew profits by 39% to $22 billion.

Folks, let that sink in for a moment.  Facebook is a massive company.  They grew earnings by 39%.

Revenues increased by 37% to $56 billion.

Monthly average users increased by 189 million in North America.

This goes to show you that as an investor, you should never react to headlines.

Do you have any idea how many times someone has written Apple’s (NASDAQ: AAPL) obituary over the last 30 years?  More than I can remember.

 

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