Are you considering entering the stock market? You may want to be careful about investing in trendy or popular stocks.
Trendy stocks are often characterized by a sudden rise in popularity due to hype, causing short-term stock price increases. Trending stocks, on the other hand, represent companies that benefit from long-term changes in consumer preferences, such as Airbnb (ABNB).
Yahoo Finance’s Julie Hyman takes a deep dive into the stock trades of companies as diverse as Uber (UBER), Roblox (RBLX), and Beyond Meat (BYND). She explains the concept of trending stocks and trending stocks and helps investors navigate the market when discussing these types of investments.
For more expert insights and the latest market trends, click here to watch the entire episode. wealth!
This post was written by angel smith
video transcript
With Peloton down over 97% from its all-time high, you might want to learn how to distinguish between a Fed and a trend that beats it.
We asked Julie Hyman from Yahoo Finance to talk about this.
Hey Julie.
Hey Brad, I’d like you to give me a quick guide on how to do that.
So, only time will tell for sure if this really happens, but here are some examples.
And what triggered this in my brain was Roblox, the company that is releasing its earnings this week for those of you who are not familiar with Roblox.
A video game platform.
People can build games on it and play games on it.
There are tens of millions of games out there and so many people out there, including my kids.
If you think about Warren Buffett, which is a well-known investment, Roblox is also well-known in my own household.
But as you can see, the stock price fell quite sharply this week after the company released a booking forecast that disappointed investors.
And you know, this is one of those companies whose staying power is questionable.
If you look back at how stock prices have trended since the company went public a few years ago, you’ll see that stock prices have fallen sharply.
So I’ve been thinking about the definition of this kind of fad.
From a consumer perspective, this is a fad, right?
The practice and interest in exaggerated transactions continued for some time.
I mean, it’s everyone everywhere at once and it’s super popular, but fads tend to die out quickly, right?
So, another kind of masterpiece or example that’s been really in the news lately is Peloton, and Peloton’s kind of fad is probably evident if you look at its sales trajectory, of course, going back to 2021 when everyone was at home. When you look at its products, it boasts sales of about 4 billion yen.
And since then, this price has been on the decline, especially as we’ve seen a drop in hardware, the bike itself, and cycles, which the company is trying to compensate for, for example, by increasing platform subscriptions.
It was an interesting trajectory.
As you can see here, Peloton’s stock chart looks much uglier than Obstacle’s chart.
It’s down 95% over the past three years and 97% from its 2020 high.
There are also non-meat examples here.
Now, some might argue that plant-based meat is here to stay.
But if you go to the grocery store, you’ll see a lot of different types of meat in the freezer, not just Beyond meat.
I mean, we saw that stock crash.
On the other hand, there are some things that people probably thought were trends that ended up having staying power.
I’m thinking specifically about Uber here. If you make the most of this graph, then yes, you will actually see the stock price go up.
And initially there were some real questions about whether Uber would be a sustainable business.
Both because something is happening in the business itself.
They were following people after they got out of their cars, and there were just regulatory hurdles and things like that.
I also remember when Airbnb first came out, I was told I was going to rent out rooms in my house to strangers. Still, while the stock price is down from its early highs, it clearly had some staying power.
It definitely has recent performance.
So I’ve been thinking about it that way.
And, you know, there are examples of each, but again, it’s kind of a time game Blood that we have to see if it survives in the end.
Yeah.
So let’s talk about investment trends, consumer trends, and how each case study aligns.
Yeah, I mean, are some of them both correct?
In the case of something like Peloton, it’s clear that the stock price rose in response to enthusiasm for the product itself.
But I think we need to distinguish between investment trends and consumer trends.
What I’ve been talking about so far is more about consumer trends.
When we talk about investment trends, I think we can say that meme stocks are one example. This is a heat map of meme stocks, right?
And then there was the meme stock boom, which was about the stock itself rather than necessarily the popularity of the underlying product or gaming stock. For example, I think it was a host or a couple, but not everyone suddenly started moving, the theater rushes into GameStop.
But do people want to invest in these types of stocks?
You might think of Bitcoin as another type of investment boom, but it may have a little more staying power because people have gone through different cycles and come back to Bitcoin.
So when you’re sorting through them in your head and thinking about whether or not you should go after something, think about Julie Eyman herself.
There are no trends.
Always on trend Julie, thank you.
