Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Green Mountain Coffee Roasters Inc. (GMCR), Tesla Motors Inc (TSLA): Is Optimism Bad?

We’ve seen the same extremes hit individual stocks on frequent occasions. Just take a look at yesterday’s big movers:

  • Green Mountain Coffee Roasters Inc. (NASDAQ:GMCR) soared 28% yesterday after announcing a five-year deal with Starbucks Corporation (NASDAQ:SBUX), capping a rise of 350% since the stock’s lows last summer, which came from the threat of Green Mountain’s K-Cup technology coming off patent and other missteps from company management. Yet despite that impressive rebound, the stock is still below levels from two years ago.
  • Tesla Motors Inc (NASDAQ:TSLA) jumped almost 25% on news of its first-ever quarterly profit, hitting new all-time highs from its mid-2010 IPO. Yet the stock already values the company at a fifth of industry rival General Motors Company (NYSE:GM)‘s market cap, despite General Motors Company (NYSE:GM)’s $150 billion in sales compared to Tesla Motors Inc (NASDAQ:TSLA)’s roughly $400 million, reflecting impressively optimistic sentiment.

You can find similar long-term moves from other stocks. The rise and fall of Netflix, Inc. (NASDAQ:NFLX) in light of its strategic shift from DVD home delivery to streaming video reflects huge changes in investor sentiment throughout its achievements and miscues. Investors were happy about growth until they decided that a price hike would threaten subscription growth; yet once it became clear that subscribers hadn’t abandoned the service, the stock came roaring back again.

Don’t panic, but be prepared
The current figures on stock market sentiment aren’t reason to sell everything right away. But by keeping tuned to this type of sentiment-driven news, stock investors can prepare their portfolios for the next turn in the market — whenever it comes to pass.

The article The News Stock Market Bulls Don’t Want to Hear originally appeared on

Fool contributor Dan Caplinger has no position in any stocks mentioned. You can follow him on Twitter @DanCaplinger. The Motley Fool recommends Green Mountain Coffee Roasters, Netflix, and Tesla Motors . The Motley Fool owns shares of Netflix and Tesla Motors.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.