Fed Chair Yellen says to sell small caps, and social media stocks....
She says the valuations are stretched. What, so now we have the Federal reserve telling the market what to buy and what to sell? Raise your hand if you think the government is way out of hand, and esp. the power of the Fed.
you must be long YELP. Fed Chair Yellen made no mention of buying/selling any certain securities. Her reference was that the valuation metrics of these sectors appeared stretched compared to historical long-term averages for these sectors. that is not a recommendation, that is an observation of a fact.
First, I am long Yelp as of 10 minutes ago (67.45) but second, what historical valuation of the sector? Facebook has been traded for one year, Twitter not even a year, Yelp also a newcomer. When people use the word historical I expect them to be talking about more than 1 year. And no, this sector is not stretched compared to its historical valuations. In fact, Yelp is down 40% and Twitter is down 50%.