Author Topic: Anyone tempted to buy Facebook shares?  (Read 3053 times)

skip207

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Anyone tempted to buy Facebook shares?
« on: July 27, 2018, 08:31:56 AM »
Down 20%... could be time to pick up some at a really nice discount??

DreamFIRE

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Re: Anyone tempted to buy Facebook shares?
« Reply #1 on: July 27, 2018, 08:42:30 AM »

Shouldn't this be in the investing section?  I'm not interested as I don't invest in individual stocks.

YttriumNitrate

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Re: Anyone tempted to buy Facebook shares?
« Reply #2 on: July 27, 2018, 08:50:01 AM »
Nope, Facebook is starting to feel more like MySpace by the day.

DreamFIRE

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I'm a red panda

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Re: Anyone tempted to buy Facebook shares?
« Reply #4 on: July 27, 2018, 09:05:52 AM »
No. Although I think it will recover, I do not stock pick.

EnjoyIt

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Re: Anyone tempted to buy Facebook shares?
« Reply #5 on: July 27, 2018, 11:16:18 AM »
No.
Market timing does not work.

Bell.Hoodoos

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Re: Anyone tempted to buy Facebook shares?
« Reply #6 on: July 27, 2018, 12:31:41 PM »
I was tempted but quickly dismissed the thought

MilesTeg

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Re: Anyone tempted to buy Facebook shares?
« Reply #7 on: July 27, 2018, 12:42:06 PM »
Keep in mind, the FB crash was the "biggest loss" in U.S. history, but by value, not percentage. ~20% daily drops are actually pretty common.

ketchup

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Re: Anyone tempted to buy Facebook shares?
« Reply #8 on: July 27, 2018, 12:52:41 PM »
I see Facebook towards the beginning of a slow decay.  I know it's a lot less relevant for teenagers now than it was for people my age (27) when we were teenagers.

That said, I don't personally stock pick.

Syonyk

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Re: Anyone tempted to buy Facebook shares?
« Reply #9 on: July 27, 2018, 01:22:02 PM »
Facebook is both running out of new people to expand to, and people who are on it are dropping off like flies, and radically reducing their use because Facebook is, generally speaking, evil.  They show you what will keep you "most engaged," not what you actually care to see, and I run into more and more people who are just saying, "You know, this is not worth the benefits anymore."  Well, with a few exceptions.  Those who think Facebook is just the bee's knees are usually in their 60s or older and think it's amazing.

I think they're running into the limits of hype, which means their stock isn't going to keep climbing for the moon.

ProxyRetired

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Re: Anyone tempted to buy Facebook shares?
« Reply #10 on: July 27, 2018, 01:38:13 PM »
Sure, wrapped inside VTSAX. :)

Joeko

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Re: Anyone tempted to buy Facebook shares?
« Reply #11 on: July 27, 2018, 09:08:30 PM »
I couldnít invest in FB because of their disregard for their customers privacy.

Adam Zapple

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Re: Anyone tempted to buy Facebook shares?
« Reply #12 on: July 28, 2018, 03:46:40 AM »
I think in the U.S. and likely Canadian/Australian/UK markets, facebook is likely at the beginning of a major decline.  They are expanding in other markets, but the wealthiest markets are beginning to leave for other social media sites.  I would not buy it.  Buy Amazon instead.

GrumpyPenguin

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Re: Anyone tempted to buy Facebook shares?
« Reply #13 on: July 28, 2018, 06:41:19 AM »
I also would not pick an individual stock.  Such a weird thing to ask on the MMM forum where a basic rule is to buy broad based low cost index funds.

Also, why would I buy something that I quit because it was bad for myself and society?

skip207

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Re: Anyone tempted to buy Facebook shares?
« Reply #14 on: July 28, 2018, 06:52:58 AM »
So that's a no then LOL.

Psychstache

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Re: Anyone tempted to buy Facebook shares?
« Reply #15 on: July 28, 2018, 07:01:51 AM »
I also would not pick an individual stock.  Such a weird thing to ask on the MMM forum where a basic rule is to buy broad based low cost index funds.

Also, why would I buy something that I quit because it was bad for myself and society?
There are lots of companies that are bad for you and society within those broad based low cost index funds though (including Facebook).

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use2betrix

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Re: Anyone tempted to buy Facebook shares?
« Reply #16 on: July 28, 2018, 09:32:33 AM »
I also would not pick an individual stock.  Such a weird thing to ask on the MMM forum where a basic rule is to buy broad based low cost index funds.

Also, why would I buy something that I quit because it was bad for myself and society?

If you want to look at just one side, someone could argue cell phones are bad for society because of all the accidents and deaths caused due to people being distracted by their phones?

Of course, one could easily argue how many lives theyíve saved.

Iím not saying Facebook is 100% the same, but there are many ways it can be great for family, friends, relationships, etc.

Syonyk

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Re: Anyone tempted to buy Facebook shares?
« Reply #17 on: July 28, 2018, 10:33:57 AM »
Except it's objectively terrible at all those things...

dustinst22

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Re: Anyone tempted to buy Facebook shares?
« Reply #18 on: July 28, 2018, 11:22:44 AM »
Facebook is really a monopoly in social media to a certain extent.  They really have no strong competition when you include Instagram.

Their revenues are still strong, they still have decent growth revenue and user wise.  They have a fantastic advertising model that is unique to anything else out there.  I don't see it stopping and it will only improve.

The problem is their operating margin is lower now, and will be for years due to having to invest much more into security than before.  This was not priced into the stock and had to be corrected.  Because of this, I think it will rebound but it will be a long road and not fast.  From a single stock perspective, I like amazon much more -- but I don't buy single stocks.
« Last Edit: July 28, 2018, 11:26:04 AM by dustinst22 »

markpst

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Re: Anyone tempted to buy Facebook shares?
« Reply #19 on: July 28, 2018, 01:53:12 PM »
Facebook also owns Instagram and WhatsApp. I don't think most are aware of that. The drop in price made headlines - much more of a 'wow' headline than saying it dropped to the price it was at in early May.

Accidental Miser

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Re: Anyone tempted to buy Facebook shares?
« Reply #20 on: July 28, 2018, 02:21:06 PM »
I dislike Facebook and never use it and never will. 

So, of course I bought $5000 worth when it tanked.  It's a good business with years to grow.  It makes a ton of money.  Margins are very strong.  It grows earnings like crazy.  Forward PE is about 19.  I could go on but I think it'll recover and go to new highs over the next year.


 

dustinst22

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Re: Anyone tempted to buy Facebook shares?
« Reply #21 on: July 28, 2018, 02:49:28 PM »
Margins are very strong. 

They have been in the past but are shrinking.  The main reason we saw this correction is because of this.  Zuckerberg has warned that margins are going to be quite a bit slimmer going forward.  Additionally video/story media doesn't monetize as well (particularly on mobile), and that is becoming a more dominant form of media consumption across all SNs.  It's a tough balancing act of monetizing ads and not annoying your users, and FB probably doesn't want to get too aggressive with video ads, hence it doesn't monetize as well.  The newsfeed monetization strategy works well, as the ads aren't too annoying, video and mobile is tougher.  Myspace learned this lesson the hard way. 
« Last Edit: July 28, 2018, 02:58:17 PM by dustinst22 »

Raymond Reddington

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Re: Anyone tempted to buy Facebook shares?
« Reply #22 on: July 28, 2018, 04:32:38 PM »
I'm not in because I'm buy and hold all the way. The younger generation just simply isn't into Facebook that much, and that's their flagship product. Younger people are tired of all the political posts, the bad algorithms for the news feed, and the inauthentic interactions that now take place as employers, etc. have flooded the site. The site is primarily a daily occurrence for older people, or people who spend a very limited amount of time on it compared to what it used to be. It's main "value" at this point is sites that use Facebook for their comments sections, as people whose devices "remember them" can comment on those sites using their Facebook account (which can and does have repercussions btw, if they post something controversial). While they are still able to derive revenue, I question the effectiveness of advertising on social media, and find it more likely that yield on Facebook ads will go down as people become further desensitized to them. They fell into the trap of trying to monetize everything, pissed off a major section of their user base in the process, and are going to have a very hard time turning it around at this point over the long term. Social media might be here to stay (although a real possibility exists of people swearing it off at some point), but Facebook has gone back on everything that made it unique when it first came out, so while it will probably rebound in the medium term, I think there are better stocks right now even at FB's discounted valuation. Just my 2c.

whywork

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Re: Anyone tempted to buy Facebook shares?
« Reply #23 on: July 28, 2018, 07:26:17 PM »
not a bad idea to buy now. not as safe as buying an index when it is down but still mostly it is a good buy now

swampwiz

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Re: Anyone tempted to buy Facebook shares?
« Reply #24 on: July 28, 2018, 08:23:36 PM »
As for myself, I always load up on browser add-ons that block ads, including a special one devoted to Facebook.  While there is some value, I think it's overpriced.

Raymond Reddington

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Re: Anyone tempted to buy Facebook shares?
« Reply #25 on: July 28, 2018, 09:27:38 PM »
As for myself, I always load up on browser add-ons that block ads, including a special one devoted to Facebook.  While there is some value, I think it's overpriced.

Same. Social fixer (set to not allow political posts, sponsored posts, posts with the word zodiac, posts with the word democrats, or posts with the word republicans) + ad block plus. Dynamite!

skip207

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Re: Anyone tempted to buy Facebook shares?
« Reply #26 on: July 29, 2018, 12:43:52 AM »
Some interesting replies.  I have to agree that funds are generally what I invest in but I do have a normal trading account and from time to time I do buy single stocks making up a very small % of my NW.  Its just for a bit of fun, not serious investing really.

GrumpyPenguin

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Re: Anyone tempted to buy Facebook shares?
« Reply #27 on: August 01, 2018, 11:26:33 AM »
I also would not pick an individual stock.  Such a weird thing to ask on the MMM forum where a basic rule is to buy broad based low cost index funds.

Also, why would I buy something that I quit because it was bad for myself and society?
There are lots of companies that are bad for you and society within those broad based low cost index funds though (including Facebook).

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Yes, there no doubt is.  I'm of the opinion though that I should not let the perfect be the enemy of the good.

mathlete

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Re: Anyone tempted to buy Facebook shares?
« Reply #28 on: August 06, 2018, 09:28:48 AM »
A good day for facebook. Since the initial drop (and my own entry point), it's up about 3.5% on the S&P. I cashed out.

After tax considerations, I gained close to 2.7% in about two weeks. I tend to do this a lot.

1.) Spot what I believe to be an overreaction in the price of a company I believe in long(er) term more than most
2.) Buy in
3.) Sell after I get a quick lead over the market after tax and commission considerations

This is probably bad behavior, since if I truly believed in the company, wouldn't I hold longer term? But I tend to do about 1 or 2 of these a year, and it's a big reason why my lifetime returns (~9 years of doing this) beat the market.

I'm in diminishing returns territory though given that I only do this in my personal brokerage account. Now my retirement accounts far outweigh the brokerage account. So 3 or 5 or 10 percent gain on a portion of my brokerage account doesn't drag up my average returns all that much anymore.

Something for me to think about.


One

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Re: Anyone tempted to buy Facebook shares?
« Reply #29 on: August 06, 2018, 10:54:33 AM »
A good day for facebook. Since the initial drop (and my own entry point), it's up about 3.5% on the S&P. I cashed out.

After tax considerations, I gained close to 2.7% in about two weeks. I tend to do this a lot.

1.) Spot what I believe to be an overreaction in the price of a company I believe in long(er) term more than most
2.) Buy in
3.) Sell after I get a quick lead over the market after tax and commission considerations

This is probably bad behavior, since if I truly believed in the company, wouldn't I hold longer term? But I tend to do about 1 or 2 of these a year, and it's a big reason why my lifetime returns (~9 years of doing this) beat the market.

I'm in diminishing returns territory though given that I only do this in my personal brokerage account. Now my retirement accounts far outweigh the brokerage account. So 3 or 5 or 10 percent gain on a portion of my brokerage account doesn't drag up my average returns all that much anymore.

Something for me to think about.

Goog job, that was smart. I'd have kept the FB though, I like to have 10% of my portfolio in individual stocks and that's a good one.

Accidental Miser

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Re: Anyone tempted to buy Facebook shares?
« Reply #30 on: August 06, 2018, 11:10:42 AM »
A good day for facebook. Since the initial drop (and my own entry point), it's up about 3.5% on the S&P. I cashed out.

After tax considerations, I gained close to 2.7% in about two weeks. I tend to do this a lot.

1.) Spot what I believe to be an overreaction in the price of a company I believe in long(er) term more than most
2.) Buy in
3.) Sell after I get a quick lead over the market after tax and commission considerations

This is probably bad behavior, since if I truly believed in the company, wouldn't I hold longer term? But I tend to do about 1 or 2 of these a year, and it's a big reason why my lifetime returns (~9 years of doing this) beat the market.

I'm in diminishing returns territory though given that I only do this in my personal brokerage account. Now my retirement accounts far outweigh the brokerage account. So 3 or 5 or 10 percent gain on a portion of my brokerage account doesn't drag up my average returns all that much anymore.

Something for me to think about.

I do the same with the buy side but I only buy them in my retirement accounts and I donít sell them (with a very, very rare exception).  When the pain and panic crowd comes out hollering, I jump in and BUY.  After a few weeks, I generally have a tidy profit and some shares of a company I like for the long term. 

Nice job on the panic swing trade, though.  Nothing wrong with scalping 3-5% in a couple of weeks and moving on.  It makes the pool of potential candidates much larger if you donít have to consider the long-term implications.  Plus itís just fun!!

PDXTabs

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Re: Anyone tempted to buy Facebook shares?
« Reply #31 on: August 06, 2018, 12:12:14 PM »
The top five holdings of my VTWSX are:
  • Apple
  • Microsoft
  • Amazon
  • Alphabet
  • Facebook

I feel no need to buy more Facebook than I already have in VTWSX.

talltexan

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Re: Anyone tempted to buy Facebook shares?
« Reply #32 on: August 06, 2018, 01:17:54 PM »
I don't think the problem with Facebook is that they fail to pay a dividend. Out of the big tech stocks, AAPL and MSFT are the only dividend payers.

mathlete

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Re: Anyone tempted to buy Facebook shares?
« Reply #33 on: August 06, 2018, 02:13:23 PM »
I don't think the problem with Facebook is that they fail to pay a dividend. Out of the big tech stocks, AAPL and MSFT are the only dividend payers.

Agreed.

I also think the argument can be made that Apple was a better company before Steve Jobs died and Carl Icahn and others pressed for a dividend.

Maybe that's splitting hairs. It was a great company in 2009 and it's a great company now. But still.

jakubdudek

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Re: Anyone tempted to buy Facebook shares?
« Reply #34 on: August 07, 2018, 06:18:41 AM »
Facebook price to revenue ratio is around 10, even after it's big 20% drop.  here's a bit of dotcom bubble wisdom from Sun Micro's CEO, a few years after Sun was on it's way to the moon with ridiculous valuations, and incidentally, also a price to revenue ratio of 10.

"At 10 times revenues, to give you a 10-year payback, I have to pay you 100% of revenues for 10 straight years in dividends. That assumes I can get that by my shareholders. That assumes I have zero cost of goods sold, which is very hard for a computer company. That assumes zero expenses, which is really hard with 39,000 employees. That assumes I pay no taxes, which is very hard. And that assumes you pay no taxes on your dividends, which is kind of illegal. And that assumes with zero R&D for the next 10 years, I can maintain the current revenue run rate. Now, having done that, would any of you like to buy my stock at $64? Do you realize how ridiculous those basic assumptions are? You donít need any transparency. You donít need any footnotes. What were you thinking?"

Facebook is a terrible long term investment because it is massively over valued.  Can you make a quick buck on a rebound?  maybe.

appleshampooid

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Re: Anyone tempted to buy Facebook shares?
« Reply #35 on: August 07, 2018, 09:10:39 AM »
Agreed. If you're an indexer, you already own Facebook. Unlike owning Facebook stock directly, you'll also realize a regular benefit in the form of regular dividend income.

If you're goal is to buy the stock just to realize a quick gain when it inevitably bounces back, that I get. Outside of that scenario, I wouldn't touch FB stock. It's not currently a long term play https://ron-henry.com/capital-appreciation-vs-dividend-growth-investing/

If you're holding onto my money, I want to be paid when you get paid.
capitalninja, did you see my post over here about your strategy? I am curious what you hold in your portfolio (individual dividend producing stocks vs. a high dividend or dividend growth index):
https://forum.mrmoneymustache.com/investor-alley/crash-during-fi/msg2095411/#msg2095411

Cache_Stash

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Re: Anyone tempted to buy Facebook shares?
« Reply #36 on: August 10, 2018, 01:53:02 PM »
Bought FB and added 3X.  Average cost: $39.45. 

I'm thinking that their growth story is coming to and end. 

Zamboni

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Re: Anyone tempted to buy Facebook shares?
« Reply #37 on: August 10, 2018, 03:25:50 PM »
Nope. Not tempted. FB has been on the way out for awhile.

dustinst22

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Re: Anyone tempted to buy Facebook shares?
« Reply #38 on: August 11, 2018, 10:49:18 AM »
Nope. Not tempted. FB has been on the way out for awhile.

Based on what?  On the contrary, I think FB is a sort of monopoly.  Still wouldn't buy its stock though.

shinn497

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Re: Anyone tempted to buy Facebook shares?
« Reply #39 on: August 12, 2018, 01:21:47 AM »
even if the fb app is declining, fb itself is diversified to insta, whatsapp, and several other ventures. I think the company will be just fine.