Take a look at Google and Chipotle Mexican Grill after missing earnings. We like Google over the longer term as it is one of the world’s most innovative companies. But going long into earnings after an almost 50 percent run-up in three months? Come on, that’s asking for trouble, no? Bulls eat, bears eat, pigs get slaughtered.
As for Chipotle, we’ve traded small amounts in the past and found it too illiquid for us. Once the momentum deflates in these high flyers its tough to regain traction, which is reflected in the chart below. Furthermore, we don’t know beans about its fundamentals, but David nailed this one!
(click here if charts are not observable)