Analyst Moves Push eBay and Facebook in Opposite Directions

Major indexes continue poor 2014 performance.

Jan 6, 2014 at 9:00PM

Although we don't believe in timing the market or panicking over daily movements, we do like to keep an eye on market changes -- just in case they're material to our investing thesis.

After today's declines -- in which the Dow Jones Industrial Average (DJINDICES:^DJI) lost 44 points, or 0.27%, the S&P 500 fell 0.25%, and the Nasdaq declined 0.44% -- 2014 has started off as quite the bearish year. After three days of trading, the Dow is down 151 points, or 0.91%, while the S&P 500 is off 21 points, or 1.16%, and the Nasdaq is down 62, points or 1.5%. Investors need to remember that sentiment can change quickly on Wall Street, and just because we had a great year in 2013, that doesn't guarantee a good one in 2014.

As Fools know, thinking long-term and considering a stock's potential for months and years, not just over a few days, is the best way to invest. But let's see why a few stocks made some big moves today, because the reason with our first company could change the direction the business heads in the future.

Within the Dow, Microsoft (NASDAQ:MSFT) closed the session down 2.11%, following a report from The Wall Street Journal indicating that both current CEO Steve Ballmer and former CEO and founder Bill Gates plan to stay on the Microsoft board for the foreseeable future. The news left many observers concerned that their continued presence could hamper a new CEO's independence. Gates and Ballmer have been the company's only two CEOs, and although they've brought the company a long way, Microsoft needs to change if it wants to stay relevant.  

Outside the Dow, a few analysts' ratings changes led to some big moves today. Facebook (NASDAQ:FB) got a price target increase from Morgan Stanley (NYSE:MS), whose analyst believes the senior social-media company has a clear edge against its competitors when it comes to attracting advertising dollars. Morgan Stanley maintained its "overweight" rating but raised its price target from $53 to $62. The analyst also believes that Facebook's ads and video-ad tests on Instagram are a sign of likely increased revenue in the future.  

Earlier this afternoon, I discussed why Morgan Stanley downgraded another social-media company -- Twitter. And the firm didn't stop there with its downgrades today: It also cut eBay (NASDAQ:EBAY) from "overweight" to "equal weight," citing valuation and risks in 2014 and 2015 sales and earnings estimates because of slowing trends in Omnichannel/offline initiatives. eBay and have built out their seller and retailer networks so quickly that they're nearly maxed out. That doesn't mean sales or earnings are being estimated to shrink in the coming years -- just that growth will slow.  

Whether you agree or disagree with these upgrades and downgrades, remember that they're just the opinions of a few analysts. It's always best to take a number of differing opinions into consideration before making a buy or sell call, and a Wall Street analyst shouldn't carry more weight in your investing decisions than anyone else.

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Fool contributor Matt Thalman owns shares of eBay, Facebook, and Microsoft. Check back Monday through Friday as Matt explains what caused the Dow's winners and losers of the day, and every Saturday for a weekly recap. Follow Matt on Twitter: @mthalman5513

The Motley Fool recommends eBay and Facebook and owns shares of eBay, Facebook, and Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

A Financial Plan on an Index Card

Keeping it simple.

Aug 7, 2015 at 11:26AM

Two years ago, University of Chicago professor Harold Pollack wrote his entire financial plan on an index card.

It blew up. People loved the idea. Financial advice is often intentionally complicated. Obscurity lets advisors charge higher fees. But the most important parts are painfully simple. Here's how Pollack put it:

The card came out of chat I had regarding what I view as the financial industry's basic dilemma: The best investment advice fits on an index card. A commenter asked for the actual index card. Although I was originally speaking in metaphor, I grabbed a pen and one of my daughter's note cards, scribbled this out in maybe three minutes, snapped a picture with my iPhone, and the rest was history.

More advisors and investors caught onto the idea and started writing their own financial plans on a single index card.

I love the exercise, because it makes you think about what's important and forces you to be succinct.

So, here's my index-card financial plan:


Everything else is details. 

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