2017-09-07 / The Motley Fool

My Dumbest Investment

A Trip to Profitopolis

My dumbest investment was buying one of your recommendations, TripAdvisor, at $55 per share. It’s now trading for around $40 per share. Ugh.

— O. C., online

The Fool Responds: Our services are, overall, beating the market, but that doesn’t mean that every recommended stock will perform as expected or hoped. Even the best investors have gotten some calls wrong.

That said, many solid investments can look like dogs for a while. Will TripAdvisor be a long-term winner? It’s too early to say, but critics can reasonably worry about the growing competition it faces and how well it can monetize the more than 530 million user reviews on its site that cover more than a million hotels and accommodations, four million restaurants, and much more.

Still, believers have a lot to be hopeful about. Last quarter, TripAdvisor’s average monthly unique visitors reached nearly 390 million, up 14 percent year-over-year. It’s building a profit center via travel bookings and restaurant reservations, and it recently onboarded IHG and Expedia to its Instant Booking platform, which now sports all major Western hotel chains and both of the major online travel agencies. It’s also beefing up its advertising spending in order to attract more customers and fuel long-term growth.

How well the company will ultimately do remains to be seen, though, and anyone not confident that it has a good chance of succeeding should probably not be holding on to shares. ¦

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