Why Twitter, Inc. Might Keep Tanking

Does this analyst make a good case or is it just more noise from Wall Street?

Feb 6, 2014 at 3:30PM

While Fools should generally take the opinion of Wall Street with a grain of salt, it's not a bad idea to take a closer look at particularly stock-shaking upgrades and downgrades -- just in case their reasoning behind the call makes sense.

What: Shares of Twitter, Inc. (NYSE:TWTR) plummeted 20% today after the microblogging service posted disappointing quarterly results and received a downgrade -- neutral to sell -- from UBS.

So what: Along with the downgrade, analyst Eric Sheridan lowered his price target to $42 (from $45), representing about 35% worth of downside to yesterday's close. While contrarians might be attracted to today's earnings-related 20% pullback, Sheridan thinks there's plenty of room to fall given the escalating concerns over Twitter's mainstream adoption rate.

Now what: According to UBS, Twitter's risk/reward trade-off continues to be unattractive. "Twitter remains one of the most expensive stocks in our universe -- an outperformance that we believe is unlikely to be sustained given questions raised by the earnings report," noted Sheridan. "A lack of mainstream adoption or a more simplified use case was a worry of ours coming out of the IPO & seems to have come to the fore faster than we had anticipate." Of course, with the stock now off more than 30% from its December highs, those worries might be providing patient Fools with a juicy long-term growth opportunity.

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Brian Pacampara has no position in any stocks mentioned. The Motley Fool recommends Twitter. Try any of our Foolish newsletter services free for 30 days. We Fools may not 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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