Meet the Spiffy-Pop: Long-Term Holders' Reward
A spiffy-pop is when a stock rises more in a single day than you paid for it.
Overview
On Tuesday, Palantir (NASDAQ: PLTR) closed at $162.66, up $37.01 – a 29.45% jump after quarterly revenue grew 93% and the company sharply raised its full-year guidance on booming demand for its AI software. The next morning, Shopify (NASDAQ: SHOP) rose $20.94 to $144.24, up 16.98% after a second-quarter beat of its own, with revenue up 34% and guidance lifted again. The headlines called both moves "pops." For a certain kind of long-term shareholder, they were something rarer and sweeter: spiffy-pops.
The term belongs to Motley Fool Chief Rule Breaker David Gardner, who says he helped coin it because the language of investing lacked a word for the thing. A "pop" is any sharp single-day gain – David draws the line at 5% – usually on good earnings, a big deal, or an analyst upgrade. A spiffy-pop is a different animal. It happens, in David's words, when a stock "rises more in a single day than you paid for it."
Details
Read that again, because the math has nothing to do with the size of the percentage move and everything to do with your cost basis. Buy a stock at $50, hold as it climbs to $1,200, and watch it gain $65 one morning: the press logs a tidy 5% pop, but the stock just rose more in a day ($65) than you paid to own it ($50).
Source
Originally published at www.fool.com.