Why I Just Bought Facebook (FB) Stock

I just bought Facebook (FB) to be contrarian because of the way the IPO "fizzled".

I first started to think about buying Facebook because, for the last several weeks, I saw lots of news stories warning against buying Facebook when it went public.

Everywhere I looked, reports and columnists warned how the stock is over-hyped, the insiders want to cash out, people are foaming at the mouth to buy it, etc.  The stock would run away at the open and, if you were foolish enough to try and buy it during the first day, you would end up getting burned.

I've learned to be skeptical of all these financial stories.

Then, this afternoon, I saw that Facebook did go public this morning at $38.  The stock only opened at $42 (so much for the "frenzied pop"), touched $45, and now is around $40.

Also, the last couple of weeks have been bad for stocks, and it looks like Facebook failed to rally the over all market.

At this point, I don't feel like Facebook is overpriced.  I think that, over the next several months, it has a good chance to go up because, as the uncertainty with Greece works itself out, and the markets put it behind and start to recover, individual investors and funds will start to revisit Facebook.

On the other hand, I don't see a lot of room on the downside for Facebook.  Google Plus doesn't appear likely to do to Facebook what Facebook did to My Space - at least not yet.

As always, I bought Facebook as a long term investment, and plan to manage the position and harvest it for cash by trading around a core position according to my Stock Trading Riches system.