Amazon.com, Inc. (AMZN), Facebook Inc (FB): Why These Popular Stocks Are Wildly Overvalued

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Plainly stated, the risk of losing money goes up the higher the price an investor is willing to pay for a stock. These are all fine companies, but as candidates for investment, they leave a lot to be desired. As a strict value investor, I can’t possibly bring myself to pay 100 times earnings (or more) for any stock, even if I admire the underlying business. And quite honestly, it’s unlikely I’ll ever own these stocks. I don’t see Amazon.com, Inc. (NASDAQ:AMZN) or Facebook Inc (NASDAQ:FB) trading for 12 or 15 times earnings anytime soon, so strict value investors like me will have to accept watching these companies from the sidelines.

Robert Ciura has no position in any stocks mentioned. The Motley Fool recommends Amazon.com, Facebook, and Salesforce.com. The Motley Fool owns shares of Amazon.com and Facebook.

The article Why These Popular Stocks Are Wildly Overvalued originally appeared on Fool.com and is written by Robert Ciura.

Robert is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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