The Facebook Proxy: Noise Trader Arbitrage Post Mortem
- Posted by ppearlman
- on May 18th, 2012
The smartest guys got in last Friday, the second smartest guys got in yesterday and the third smartest guys are getting in today.
You do not want to be the fifth or sixth smartest guys
There will be a sell off into these names as the smartest noise trade arbitrageurs who bought last week take profits so don’t get in late or stay too long.
Indeed, all these proxy stocks are getting killed today and this should come as no surprise but I am seeing people out there who are getting dinged. Here’s $GSVC which ran Monday and Tuesday and has gotten crushed since.
We saw a similar thing with the Hunger Games $LGF trade. The movie was released on March 21st which was the high print after a big run up into the hype.
If you are not well versed in it then just stay away. You can learn how to trade them, if that is your wish, by studying these and other episodes extremely closely and then employing it for the next big event that will inevitably occur.
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Phil is the executive editor of StockTwits and an investor in the company. He is a partner at Social Leverage, LLC and makes early stage investments in web based companies. (More)