I marked PayPal at $60 back in April.
Today, a reported $60.50 takeover offer has arrived from Stripe and Advent International.
That does not mean I magically predicted a takeover. It means the chart was displaying a very simple price signal that investors frequently ignore because it looks too obvious.
Everybody wants complexity. Fibonacci levels, five-wave counts, elaborate models and complicated explanations.
Sometimes the answer is sitting there in Crayola.
PayPal was a forgotten, boring and deeply unpopular business trading on a remarkably low valuation. Now somebody else appears to have noticed that it was cheap.
Meanwhile, IBM has suffered a historic stock-market collapse after preliminary second-quarter results disappointed Wall Street.
IBM punched me yesterday. PayPal kissed me today.
That is why I own a diversified portfolio of approximately 40 value stocks and special situations. Some work immediately. Some kick me around. What matters is the performance of the portfolio over years, not whether every individual purchase instantly goes up.
In this video I explain:
Why the PayPal chart pointed towards $60
What the reported PayPal takeover offer actually means
Why the technique is more valuable than the profit
Why I bought more IBM after its collapse
The vital difference between a cheap company and collapsing rubbish
Why boring, hated companies can create enormous contrarian opportunities
This is not a tip to buy PayPal or IBM. It is raw material for your own thinking.
