Buying into sky-high valuations can be extremely dangerous. Just ask anyone who bought Facebook at the IPO. The stock has taken a beating since and remains below its offering price as of this writing.
Knowing that, why would anyone want to buy peer LinkedIn (NYSE:LNKD), which not only is measurably smaller, but trades for an astounding 900 times trailing earnings? The stock is up more than 50% year-to-date and has nearly doubled since its debut. Surely the rally is coming to an end, right?
Tim Beyers of Motley Fool Rule Breakers and Motley Fool Supernova isn't so sure, and he explains why in this video interview with the Fool's Alison Southwick. Please watch, and then leave a comment to let us know what you think.
Fool contributor Tim Beyers is a member of the Motley Fool Rule Breakers stock-picking team and the Motley Fool Supernova Odyssey I mission. He didn't own shares of any of the companies mentioned in this article at the time of publication. Check out Tim's web home and portfolio holdings or connect with him on Google+, Tumblr, or Twitter, where he goes by @milehighfool. You can also get his insights delivered directly to your RSS reader.
The Motley Fool owns shares of Facebook. The Fool has bought calls on Facebook. Motley Fool newsletter services have recommended buying shares of LinkedIn and Facebook. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.