The two biggest emotions that fuel the stock market are fear and greed. One will send stocks swooning, while the other can create bubbles. But as Warren Buffett famously says, “Be fearful when others are greedy and greedy when others are fearful.” If he’s right, then now’s the perfect time to pile into payments company Square (SQ).
In case you didn’t notice, the broader stock market just suffered its most brutal week of the year so far. The silver lining in all of the selling is that it gives investors the opportunity to buy the dip in stocks that are fundamentally solid. Square, the payments startup run by Jack Dorsey, is one such opportunity, having shed 14 percent on Friday alone. Investors got scared and fled the stock after the company issued lackluster guidance for the third quarter. Analyst firm Evercore knocked the stock down to an underperform, slashing the price target to $64. While the outlook wasn’t what Wall Street was hoping for, could they be missing the forest for the trees?
Stock Market Investors: Feeling Greedy?
Payments companies are all the rage. Everybody wants to be a bank these days. Fintech companies like Square have the best of both worlds because they are innovative enough to capitalize on the latest technology trends without having to worry about legacy systems that weigh down the banks. Square never would have been able to expand to support bitcoin payments if it were a bank, nor would it probably have wanted to. And its bitcoin revenue has been ballooning over the past year. The point is, Square is a solid long-term play in the stock market that just met a rough patch….