The WSJ published today another excellent Intelligent Investor column by Jason Zweig. Today’s piece was on the lure of high-growth, publicly-traded companies (“Glamour Stocks” as Lakonishok, et al. described them) and the probable investor disappointment with Glamour Stocks’ returns. Today’s example was Facebook. I like how Jason worked in the St. Petersburg Paradox and gave an excellent example of “inverting” the analysis to see if Facebook’s rumored valuation seemed reasonable.
Here Jason talks about the column: