“Contrarian” value investing is all about selling what is in favor and buying stocks that are out of favor. We think that Salesforce.com (CRM) is too loved by the investing herd right now and could make solid short sale profits for investors.
While high valuation is certainly not a reason to short a stock, astronomically high valuations are a red flag, and could mean that a given stock is poised to plummet when reality set in and investors head for the exits all at once. Salesforce.com is not only insanely expensive, it also has a few negative catalysts on the horizon that could hurt share prices in the near term. Over the longer term, I expect the numbers to do the talking.
Salesforce.com is all the rage right now. Saying anything negative about the stock is tantamount to blasphemy. In fact, most of the investment community takes any type of bearishness regarding CRM personally. It’s as though we bears, who are few and far between, have insulted a major religion or something!
Look, I know I am taking a major risk by not only comparing the bubble in CRM to a religious phenomenon, but in the end any system of belief that is so passionate as to warrant any kind of beheading in retaliation to a simple insult risks being labeled “inherently flawed.” Stock traders don’t always get along, and as “they” say, “that’s what makes a market.”
read more here: http://seekingalpha.com/article/494781-why-the-salesforce-com-bears-may-laugh-last-and-laugh-hardest?v=1334425465&source=tracking_notify#comment_update_link
In my view it’s time to sell before May and go away! Europe is falling apart, equities are overvalued, stocks are technically overbought, the tape is starting to point toward negative momentum, and election year gridlock means that stocks may tank hard as they did during the last election cycle.