Author Topic: Facebook IPO  (Read 34143 times)

strider3700

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Re: Facebook IPO
« Reply #50 on: May 30, 2012, 01:33:57 PM »
The law suits are because facebook realized revenues were going to go down and didn't do a proper disclosure of this info.  They told some giant investors but didn't  announce it to the public.  I'm not certain that they had to announce it to everyone but they definitely can't tell some but not others now that they're public.

tooqk4u22

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Re: Facebook IPO
« Reply #51 on: May 30, 2012, 01:39:58 PM »
The law suits are because facebook realized revenues were going to go down and didn't do a proper disclosure of this info.  They told some giant investors but didn't  announce it to the public.  I'm not certain that they had to announce it to everyone but they definitely can't tell some but not others now that they're public.


Precisely - there appears to be some back room shannigans going on.  The I-banks, facebook, and NASDAQ will likely face some sort of class action suit.

arebelspy

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Re: Facebook IPO
« Reply #52 on: May 30, 2012, 01:46:42 PM »
What would the investors sue over? You can't just decide you're going to sue because you're not happy about something.

Of course you can.  I can sue you because I don't like your username.

It'll get thrown out as frivolous, but you can - literally - sue over anything.  You just may not win.

And people actually do sue because they aren't happy about something all the time. 
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grantmeaname

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Re: Facebook IPO
« Reply #53 on: May 30, 2012, 01:55:43 PM »
The law suits are because facebook realized revenues were going to go down and didn't do a proper disclosure of this info.
The underwriter (Morgan Stanley) and the company itself are both legally prohibited from releasing any revenue information to the public within 40 days of the IPO, called the quiet period.

Precisely - there appears to be some back room shannigans going on.
You just said a handful of posts ago that backroom shenanigans are the standard condition of IPOs, and that banks usually don't pinpoint the fair valuation of the company intentionally!

Of course you can.  I can sue you because I don't like your username.
Yes, it's possible. I realize it's possible. My point is that the suit is meaningless unless they're breaking a law, and nobody's said that a law was broken. All people are saying is that they're mad that the price went down.


ErikZ

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Re: Facebook IPO
« Reply #54 on: May 31, 2012, 08:03:06 AM »
...I mean, when your customer base is a billion strong...

They're not customers, they're advertising targets. With ad filters.

I didn't buy into the Facebook IPO because I don't see how an IPO would benefit Facebook.

arebelspy

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Re: Facebook IPO
« Reply #55 on: May 31, 2012, 08:49:47 AM »
...I mean, when your customer base is a billion strong...

They're not customers

Right.  They're the product.  Their product base is a billion strong (minus shell/multiple accounts, spam accounts, those who have ads blocked, those who never log on, etc.)

Their customers are the companies buying ads.  And, as we've recently learned, mobile has a revenue problem.
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smedleyb

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Re: Facebook IPO
« Reply #56 on: May 31, 2012, 11:44:34 AM »
...I mean, when your customer base is a billion strong...

They're not customers, they're advertising targets. With ad filters.

I didn't buy into the Facebook IPO because I don't see how an IPO would benefit Facebook.

You don't see how raising billions in capital benefits Facebook? 

rjack

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Re: Facebook IPO
« Reply #57 on: May 31, 2012, 11:53:57 AM »
You don't see how raising billions in capital benefits Facebook?

No, not unless they have a excellent plan for how they are going to efficiently deploy all the capital.

smedleyb

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Re: Facebook IPO
« Reply #58 on: May 31, 2012, 11:58:14 AM »
You don't see how raising billions in capital benefits Facebook?

No, not unless they have a excellent plan for how they are going to efficiently deploy all the capital.

I'm sure Zuck plans on filling a pool with $100 bills before he lights it on fire.

As far as how FB plans on deploying their capital, can't tell you, I'm not in the boardroom.

As far as FB raising capital through equity issuance, well, that's the whole reason companies sell stock -- to raise capital.  If you don't get that, then, well, you just don't get Wall Street. 

rjack

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Re: Facebook IPO
« Reply #59 on: May 31, 2012, 12:25:19 PM »
You don't see how raising billions in capital benefits Facebook?

No, not unless they have a excellent plan for how they are going to efficiently deploy all the capital.

I'm sure Zuck plans on filling a pool with $100 bills before he lights it on fire.

As far as how FB plans on deploying their capital, can't tell you, I'm not in the boardroom.

As far as FB raising capital through equity issuance, well, that's the whole reason companies sell stock -- to raise capital.  If you don't get that, then, well, you just don't get Wall Street.

Well, since I have an MBA from a top ten business school, I think I get the idea of equity issuance. However, none of that will benefit FB and it's shareholders unless they deploy the capital to achieve a high ROI/ROA. If you don't get that, then, well, you just don't get equity investing.

smedleyb

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Re: Facebook IPO
« Reply #60 on: May 31, 2012, 12:39:02 PM »
Well, since I have an MBA from a top ten business school, I think I get the idea of equity issuance. However, none of that will benefit FB and it's shareholders unless they deploy the capital to achieve a high ROI/ROA. If you don't get that, then, well, you just don't get equity investing.

Impressive credentials.

Which is why your failure to understand the logic behind the IPO is so mind boggling. 

As far as equity investing goes, I predicted last week a FB share price between 26-28 bucks.  Oh look, FB is around 27.50 as we speak!

Still not buying it, yet.

« Last Edit: May 31, 2012, 12:40:40 PM by smedleyb »

smedleyb

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Re: Facebook IPO
« Reply #61 on: June 04, 2012, 12:52:44 PM »
The slow drip to the low 20's continues...

Couldn't have happened to a crappier IPO, IMO.

The more I hear about the pre-IPO shenanigans the less I want to get near this stock/company.  Like others above pointed out the $38 valuation was rich -- and that was before we head FB was having trouble monetizing mobile.  I was letting my desire to buy and flip FB for a quick buck push me into defending the basic value of a company whose product I don't even use or care to use.   

On the other hand, I'm always on somebody's Twitter page.  Hmmm....


menorman

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Re: Facebook IPO
« Reply #62 on: June 07, 2012, 03:56:09 PM »
Well, since I have an MBA from a top ten business school, I think I get the idea of equity issuance. However, none of that will benefit FB and it's shareholders unless they deploy the capital to achieve a high ROI/ROA. If you don't get that, then, well, you just don't get equity investing.

Impressive credentials.

Which is why your failure to understand the logic behind the IPO is so mind boggling. 

As far as equity investing goes, I predicted last week a FB share price between 26-28 bucks.  Oh look, FB is around 27.50 as we speak!

Still not buying it, yet.
The FB couldn't have come at a worse time from a flipper's standpoint. The media had everyone hyped to believe that the FB IPO would be the best thing since the wheel. Then when the IPO happened and it turned out that the wheel actually was quite amazing, the horde of fingers starting pointing to figure out why FB could reinvent the wheel. While sure, there may have been some problems with the IPO itself and people can feel like they were also gypped on the information front, they're all forgetting one crucial thing. FB showed up on the market, which was (and still apparently is) in a downward trend. Therefore, just about everything in the market will go down as well--including FB. So while I agree there were some things before the IPO that appear interesting, I think a major part of the price decline is related to the broader market decline as a whole. At the same time, I can definitely see FB coming into more reasonable pricing territory and a decent entry point for someone waiting for the market to rise again.

KittyWrestler

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Re: Facebook IPO
« Reply #63 on: June 07, 2012, 04:54:16 PM »
I am puzzled by the recent Apple partnership with Facebook...

Grigory

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Re: Facebook IPO
« Reply #64 on: June 08, 2012, 01:50:22 AM »
The media had everyone hyped to believe that the FB IPO would be the best thing since the wheel.
Yup. To quote Warren Buffett, "be greedy when others are fearful; be fearful when others are greedy." The stampede of CNBC's lemmings told me everything I needed to know.

smedleyb

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Re: Facebook IPO
« Reply #65 on: June 08, 2012, 07:28:40 AM »
The media had everyone hyped to believe that the FB IPO would be the best thing since the wheel.
Yup. To quote Warren Buffett, "be greedy when others are fearful; be fearful when others are greedy." The stampede of CNBC's lemmings told me everything I needed to know.

I think we're reaching the other extreme -- extreme fear vs. extreme greed.   Next whoosh lower and I'm a buyer of FB.

arebelspy

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Re: Facebook IPO
« Reply #66 on: June 08, 2012, 07:32:38 AM »

I think we're reaching the other extreme -- extreme fear vs. extreme greed.   Next whoosh lower and I'm a buyer of FB.

So tell me - what's your strike price, and how did you reach that number?
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smedleyb

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Re: Facebook IPO
« Reply #67 on: June 08, 2012, 08:14:56 AM »

I think we're reaching the other extreme -- extreme fear vs. extreme greed.   Next whoosh lower and I'm a buyer of FB.

So tell me - what's your strike price, and how did you reach that number?

Strike price is low 20's and I reached it by:

(a) recognizing the hype of the IPO and not wanting any part of it;

(b) recognizing the present day universal disgust for the stock and seeing an opportunity to buy it.

(c) recognizing the strong fundamentals (growth rate) behind social media.

(d) recognizing the stock is selling off within a generally weak market, which may weaken further to the tune on another 5-10%.  In that scenario I doubt FB bucks the downward trend (it hasn't so far).

For me, markets are 90% psychology and about 10% fundamentals.  The idea that markets can't be predicted is akin to the idea that human behavior can't be predicted.  If that were the case, psychology and sociology would be worthless disciplines, which they clearly are not.  It's all about probabilities and money management, and the risk reward is a heck of a lot better in the low 20's.   Doesn't mean I'll even get the opportunity as the stock seems to be attempting to put a bottom in around here and may rally a bit, especially if it can power through $27.50. 

Just tying to be opportunistic. 

arebelspy

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Re: Facebook IPO
« Reply #68 on: June 08, 2012, 09:30:55 AM »
What is "low 20s"?  And why do you feel FB's proper valuation is there, as opposed to "high teens" or "mid 20s"?
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smedleyb

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Re: Facebook IPO
« Reply #69 on: June 08, 2012, 11:21:39 AM »
What is "low 20s"?  And why do you feel FB's proper valuation is there, as opposed to "high teens" or "mid 20s"?

"Proper valuation" is a mythical concept.  Markets are inefficient mechanisms.  The Soros article linked above explains why.


grantmeaname

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Re: Facebook IPO
« Reply #70 on: June 08, 2012, 11:33:59 AM »
The Soros article must have been linked in another thread, I don't see it. Why do you think markets are inefficient?

smedleyb

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Re: Facebook IPO
« Reply #71 on: June 08, 2012, 11:57:28 AM »
The Soros article must have been linked in another thread, I don't see it. Why do you think markets are inefficient?

Markets are driven by buyers and sellers, both of whom have incomplete information and are driven by the emotions of fear and greed.  In that interplay of emotion and partial knowledge one can exploit advantageous risk/rewark opportunities.

arebelspy

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Re: Facebook IPO
« Reply #72 on: June 08, 2012, 07:11:28 PM »
You still didn't answer this easy one: What is "low 20s"?

But okay, let's play a fun semantics game!

Let's redefine proper valuation from whatever you think it is to: the price point that it's worth, including the fact that everyone has incomplete information and are driven by emotions.

Now that we have that cute definition...

Why do you feel FB's proper valuation (under our new definition) is low 20s, as opposed to "high teens" or "mid 20s"?
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smedleyb

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Re: Facebook IPO
« Reply #73 on: June 08, 2012, 07:55:54 PM »
What is low 20's?   I don't know, $23.67?  Maybe $22.44?  Does $24.98 fit the bill?  I didn't realize your question required such painstaking detail.

Let's play another game, called "stop being coy and just say what you want to say."  I've given you my price targets (which have proved accurate so far), I've explained why I'm warming up to FB a couple posts above, yet you keep fishing for something.  Get it off your chest, man. 

And enough with "proper valuation."  I don't even know what that means, frankly. 

arebelspy

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Re: Facebook IPO
« Reply #74 on: June 08, 2012, 08:44:39 PM »
I don't have anything to say, I'm trying to understand your thought process and where you're coming from.

You apparently are getting hung up on the terminology of "proper valuation" when I don't mean anything by it, but it's apparently a loaded term for you.

How about "the right price"?  Is that an acceptable phrase?

So substitute that in.  Why is 23.67 the right price for you, and not high teens or mid 20s?
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smedleyb

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Re: Facebook IPO
« Reply #75 on: June 09, 2012, 10:16:50 PM »
I don't have anything to say, I'm trying to understand your thought process and where you're coming from.

You apparently are getting hung up on the terminology of "proper valuation" when I don't mean anything by it, but it's apparently a loaded term for you.

How about "the right price"?  Is that an acceptable phrase?

So substitute that in.  Why is 23.67 the right price for you, and not high teens or mid 20s?

Au contraire,  I believe you do have something to day; and I think it's you getting "hung up" on this notion of proper valuation -- but I wont belabor these points because they're inconsequential to the task at hand, namely, getting paid to buy FB. 

FB hit a high of $45 on it's first day of trading.  50% off of $45 = $22.50.  Stocks tend to bounce when they drop 50% from their highs, especially stocks of companies where the fundamentals behind the company are strong, i.e., social media is one of the hottest growth sectors in the economy.  Since I'm impatient I would probably pull the trigger on half the shares I wanted to buy as the stock cracks below $25, and the remaining half around or near $22.50.   That's my strategy if/when these price levels come into play.  Mind you, I reserve the right to change my mind as new information becomes available, which is bound to happen given the chaos and uncertainty in Europe.

Another level I watch is 33% down, which was around $30.  But given that I saw the general markets acting heavy, I thought it best -- from a risk/reward perspective -- to wait until 50% down.

But I can hear you now: "well, why 50%, why not 55%, or 45%?"  And so it goes, ad infinitum







arebelspy

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Re: Facebook IPO
« Reply #76 on: June 09, 2012, 11:17:34 PM »
Makes sense, thanks for the explanation.
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smedleyb

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Re: Facebook IPO
« Reply #77 on: June 11, 2012, 02:50:07 PM »
FB was rejected again at the important 27.50 level and managed to close below the opening price, leaving what we call in technical analysis a "tail" on it's daily chart.  The fact that it held above Friday's low is a positive but I can't help but think there's another move lower before the stock can stage a rally for more than a couple days.

If last week's low of 25.5 is violated I think a quick move to that 22.50 level is in short order; if the negativity surrounding the stock (everybody hates FB, which is a far cry from a month ago when it was the media darling) increases as well, I think we'll get our first solid buying opportunity which could yield 10-30% in short order.

Hedge-funder Jim Cramer likes what he calls "3 points up, 1 point down" situations.  I think FB at $23 is a stock that could fall to $20-21, but could easily rise to $28-31 over the coming months.  That's a solid risk reward, IMO.

My goal is to commit a small amount of capital (5% of my trading account) to FB if/when my buy parameters are met, if I do anything at all.   

arebelspy

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Re: Facebook IPO
« Reply #78 on: June 11, 2012, 08:17:00 PM »
I think the Apple partnership (announced today) will help them bounce back, though it may take a bit (implementation will be in iOS 6, which is scheduled for the fall, so 3-5 months).
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Re: Facebook IPO
« Reply #79 on: June 11, 2012, 09:57:01 PM »
FB hit a high of $45 on it's first day of trading.  50% off of $45 = $22.50.  Stocks tend to bounce when they drop 50% from their highs, especially stocks of companies where the fundamentals behind the company are strong

Silly me, I thought company valuations were entirely about fundamentals.  Do you think FB is a good buy at a price to earnings ratio of 75?  50?

What's the implied P/E in your target price of $22.50/share?  Does it compare well with the rest of the market right now?

smedleyb

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Re: Facebook IPO
« Reply #80 on: June 12, 2012, 04:16:04 AM »
FB hit a high of $45 on it's first day of trading.  50% off of $45 = $22.50.  Stocks tend to bounce when they drop 50% from their highs, especially stocks of companies where the fundamentals behind the company are strong

Silly me, I thought company valuations were entirely about fundamentals.  Do you think FB is a good buy at a price to earnings ratio of 75?  50?

What's the implied P/E in your target price of $22.50/share?  Does it compare well with the rest of the market right now?

What you think and what actually drives stock prices are two different things.

Personally I've always made the most money dabbling in high P/E stocks, which come in two forms:  some stocks with high P/E's are growing rapidly and can "grow into" their earnings valuations.  A company growing it's earnings at 100% a year will see it's profits rise 3200% over a 5 year span.  A stock with a P/E of 100 growing earnings at 100% would technically have a P/E of 3.3 in 5 years.  Thus, many analysts look at what is known as the PEG ratio, or price to earnings divided by growth rate.   In the example I'm using, the company would have a PEG of 1.  Whereas a blue chip with a P/E of 14 that's growing at 7% would have a PEG of 2 and would be considered "twice as expensive" than the former. 

The other form are cyclical companies which simply have no P/E (since there is no E to speak of), or a sky high one, because profits are way down due to short term economic conditions.  On the flip side, the time to sell is when these cyclical companies have their lowest P/E (suggesting the economic cycle is peaking).  In other words, relying strictly on P/E to gauge when to buy or sell these stocks will have you buying at the top and selling at the bottom.

And this is before we get into the fact that there is so much else that moves stocks -- macroeconomic conditions, emotional trading based on fear/greed, and -- this might be the most controversial -- "technical analysis," or the interpretation of charts in the quest to determine a stock's future behavior. 

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Re: Facebook IPO
« Reply #81 on: June 12, 2012, 07:14:36 AM »
Just from my very basic reading on the topic of fundamental vs. technical analysis, I've gotta guess that the answer lies somewhere in the middle.

I saw you(smedley) claim 90/10 for emotional based. I've seen other people claim just the opposite. Both present really good arguments, and I think both are right at different times. The trick is just figuring out when to use each premise.

smedleyb

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Re: Facebook IPO
« Reply #82 on: June 26, 2012, 07:44:18 PM »
Since Arabelspy has found it necessary to attack me in another thread regarding the "nonsensical" things I've been saying about FB, I think it's necessary to recap my remarks:

On May 6, two weeks before the IPO, I said the following:

Social media will be one of the hottest growth areas over the next decade.  I want to own it,  just not sure where the proper entry point is.

I'll say this, companies like FB or LNKD will be high on my buy list when this cyclical bull runs it's course and stocks come for sale.  Could be 2 weeks from now, could be 2 years from now.   


To reiterate:  I think social media is gonna be huge, but I had no desire to buy FB at it's IPO price.  I was waiting for cheaper prices.

On May 24, I said the following:

I almost pulled the trigger on some FB around 30 bucks the other day.  But the way this market is trending, a move to $26-28 bucks wouldn't surprise me.  I mean, when your customer base is a billion strong, there's some value there not captured by a simple P/E analysis.  I'm a buyer at the right price.

Context:  after hitting a high of 45 on its opening day, FB began a viscous sell off which brought it to 31 on it's third day of trading.  Like I said in my post, I thought FB and the market had more downside, which happened to be speculative and true -- FB bottomed soon after at around $25.50, and spent a couple weeks trading between $26-28.  The market itself experienced a 4-5% decline over this period, too.

Around this time Arabelspy started "engaging" my comments, which lead to the following post on June 08:

Strike price [to buy FB] is low 20's and I reached it by:

(a) recognizing the hype of the IPO and not wanting any part of it;

(b) recognizing the present day universal disgust for the stock and seeing an opportunity to buy it.

(c) recognizing the strong fundamentals (growth rate) behind social media.

(d) recognizing the stock is selling off within a generally weak market, which may weaken further to the tune on another 5-10%.  In that scenario I doubt FB bucks the downward trend (it hasn't so far).

For me, markets are 90% psychology and about 10% fundamentals.  The idea that markets can't be predicted is akin to the idea that human behavior can't be predicted.  If that were the case, psychology and sociology would be worthless disciplines, which they clearly are not.  It's all about probabilities and money management, and the risk reward is a heck of a lot better in the low 20's.  Doesn't mean I'll even get the opportunity as the stock seems to be attempting to put a bottom in around here and may rally a bit, especially if it can power through $27.50. 

Just tying to be opportunistic. 


On that day, June 08, FB closed at a little over $27.  Over the next several sessions it traded around this important $27.50 level, and finally closed above it 4 sessions later on June 14 ($28.30).  The stock has since rallied 20% since.  No, I never bought it -- my price target (23-25) was never reached.  I simply offer this recap to counter the moderator's claim in another thread that I'm spewing "nonsense."  On the contrary, I think I bring a interesting perspective to the table and wish to be judged my actual statements, nothing more.

Your move, Mod.

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Re: Facebook IPO
« Reply #83 on: June 26, 2012, 08:09:35 PM »
Since Arabelspy has found it necessary to attack me in another thread regarding the "nonsensical" things I've been saying about FB

heh...I've half-heartedly wanted to come over here to post a little cherry-picked schadenfreude for the last week, but figured that would just be mean.  But now that arebelspy started it, I'm happy to pile on.  :-)  My angle was going to be slightly different though:

Quote from: smedleyb
I think we'll get our first solid buying opportunity which could yield 10-30% in short order.

...and you were right, we did, but your tarot-card-reading was a bit off, so you missed it!  haw haw.

smedleyb

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Re: Facebook IPO
« Reply #84 on: June 26, 2012, 08:21:29 PM »
Since Arabelspy has found it necessary to attack me in another thread regarding the "nonsensical" things I've been saying about FB

heh...I've half-heartedly wanted to come over here to post a little cherry-picked schadenfreude for the last week, but figured that would just be mean.  But now that arebelspy started it, I'm happy to pile on.  :-)  My angle was going to be slightly different though:

Quote from: smedleyb
I think we'll get our first solid buying opportunity which could yield 10-30% in short order.

...and you were right, we did, but your tarot-card-reading was a bit off, so you missed it!  haw haw.

No great shakes.  I was long the market via Sept. SPY calls.  Made a little coin. 


arebelspy

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Re: Facebook IPO
« Reply #85 on: June 26, 2012, 09:40:32 PM »
On the contrary, I think I bring a interesting perspective to the table and wish to be judged my actual statements, nothing more.

I agree with both of these.

Your move, Mod.

You say this like it's relevant to anything.  Me as a mod means I delete spam.  That's it.  My opinions are 100% my own.
« Last Edit: June 26, 2012, 09:44:05 PM by arebelspy »
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Re: Facebook IPO
« Reply #86 on: June 26, 2012, 10:12:11 PM »
On the contrary, I think I bring a interesting perspective to the table and wish to be judged my actual statements, nothing more.

I agree with both of these.

Your move, Mod.

You say this like it's relevant to anything.  Me as a mod means I delete spam.  That's it.  My opinions are 100% my own.

Again, let's focus on the argument and not the arguer.

As you said in the TEF thread:

Yeah, your quote is from the same person spouting nonsense about the Facebook IPO, who was thinking of pulling the trigger around 30, then revised to low 20s when it kept dropping.

His investment style appears akin to gambling.  Specifically betting on the longshot ponies that are "due."


I made an effort to compress my thoughts into a coherent narrative.  In what way am I spouting off nonsense?  In what way am I a gambler?  What differentiates a gambler from a speculator?  If markets are always efficient and random, why does Buffett or Tudor-Jones or Soros kick so much ass?  Or the thousands of anonymous traders who walk away with tens of millions because their "feel" for the market proved uncannily prescient?

I think a real dialogue would benefit all in this forum.  Save the lame insults for another site. 


arebelspy

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Re: Facebook IPO
« Reply #87 on: June 27, 2012, 07:30:55 AM »
Based on your last few posts in both this thread and the other one, I don't think dialogue would be productive.  I had enjoyed your posts until you went off.  You have to understand that with views like yours (which you yourself call an "interesting perspective"), you'll get some push back.  If you're too thin skinned to handle that, it'll be tough for you.

If you want to call yourself a speculator rather than a gambler, I won't quibble over that.
« Last Edit: June 27, 2012, 07:33:42 AM by arebelspy »
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smedleyb

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Re: Facebook IPO
« Reply #88 on: June 27, 2012, 07:36:19 AM »
Based on your last few posts in both this thread and the other one, I don't think dialogue would be productive.  I had enjoyed your posts until you went off.  You have to understand that with views like yours (which you yourself call an "interesting perspective"), you'll get some push back.  If you're too thin skinned to handle that, it'll be tough for you.

If you want to call yourself a speculator rather than a gambler, I won't quibble over that.

I see.  Impugn my character, call my comments nonsense, then paint me as the irrational one after I spend a little time outlining my thoughts in way that's clear and concise, albeit with a sprinkle of profanity.

 


arebelspy

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Re: Facebook IPO
« Reply #89 on: June 27, 2012, 07:58:09 AM »
I've said nothing about your character, except that maybe you're a  bit thin-skinned.  The irrational posts were the ones where you flew off the handle in multiple posts.  Or, as Mark called it, got a bit "touchy."

That aside, if you want to actually discuss the topic and can avoid getting so slighted and angry, here's my thoughts:

Of your guesses, you almost bought FB at 30.. luckily didn't.  You then said you'd pull the trigger at low 20s.  It never hit that.

I asked why low 20s was your strike point, rather than mid 20s, etc., and you couldn't articulate a reason, but wanted to quibble over the term "value".  If you had been confident about that 27.50 resistance point, and bought, you'd have a 20% gain, and I'd say hey, at least he got one prediction right.  But so far we have two wrong on Facebook, and 3 wrong on Spanish stocks.  It's hard to take predictions seriously when they keep being wrong (but vague enough that you will try to claim them right enough).

To specifically address your questions:

Quote
In what way am I a gambler?

You are a gambler because you are guessing.  You're hoping you're right, and you're trying to time investments to make money, not based on what the value of the item is (which you seem to think cannot be known), but based on other traits like "I feel like there's panic, so I should buy."

Quote
What differentiates a gambler from a speculator?

Probably not much.  I won't quibble over these terms, and if you want to be called a speculator, that's fine with me.

Quote
If markets are always efficient and random, why does Buffett or Tudor-Jones or Soros kick so much ass?

They aren't always efficient or random.  That being said, equating what you do to how Buffet invests is laughable.  He certainly looks at value.  He doesn't buy planning to sell anytime soon, his time frame is almost always decades (at a minimum).  He's buy and hold.

Can stuff be undervalued?  Certainly. 

Quote
Or the thousands of anonymous traders who walk away with tens of millions because their "feel" for the market proved uncannily prescient?

There's many millions more who lost tons in the market.  I'd say the number of traders who we don't know about (anonymous) and walked away (did not go back and speculate more and lose it all) and made tens of millions is vanishingly small.  You could probably count them on one hand.  Not the "thousands" you claim. 
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smedleyb

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Re: Facebook IPO
« Reply #90 on: June 27, 2012, 08:16:08 AM »
Many things move stocks.  The fundamentals of the company (profits, management), the psychology of investors (the duality of fear/greed), macro-economic forces (Fed turning on liquidity spigot), and "technical analysis."  Much of what Arebelspy refers to in my statements as "guessing" or "gambling" is the way in which my mental process assimilates all these variables to form an investment outlook; that outlook can be long term, it can be a matter of hours.  But my thoughts rely heavily on technical analysis when making a move -- for some, this is just a kind of weird numerology or hocus pocus investing.  For others -- Soros, Tudor-Jones, Paul O'Neil, it can be a useful tool in locating advantageous risk/reward opportunities.

Gamblers blow everything they go on long shots; speculators bet a percentage of their capital on the direction of markets --  be it Spanish stocks or real estate in Southern Nevada.  The smart speculators use sound money-management techniques (never put all your eggs in one basket; cut losses quickly); the dumb ones go all in and get blow out by the slightest market reaction.

Every time we buy any asset we hope will appreciate, we are speculating.  Especially when it comes to stocks.

grantmeaname

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Re: Facebook IPO
« Reply #91 on: June 27, 2012, 08:37:14 AM »
By buying a houses in southern Nevada with mortgages, you are:
  • taking advantage of historically low interest rates that are locked in for 30 years;
  • participating in a market that overwhelmingly favors the homeowner and the landlord over the tenant;
  • taking advantage of tax incentives designed to encourage home ownership to further cheapen the mortgages;
  • as a landlord and maintenance person, providing a valuable service for which there is a strong and consistent demand; and
  • owning, at least in part, a tangible physical property with significant legal protections for the mortgage holder
That is not equivalent to declaring that Telefonica is undervalued because your Spidey sense tingles or your chart tells you it's a buy.

smedleyb

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Re: Facebook IPO
« Reply #92 on: June 27, 2012, 08:48:47 AM »
By buying a houses in southern Nevada with mortgages, you are:
  • taking advantage of historically low interest rates that are locked in for 30 years;
  • participating in a market that overwhelmingly favors the homeowner and the landlord over the tenant;
  • taking advantage of tax incentives designed to encourage home ownership to further cheapen the mortgages;
  • as a landlord and maintenance person, providing a valuable service for which there is a strong and consistent demand; and
  • owning, at least in part, a tangible physical property with significant legal protections for the mortgage holder
That is not equivalent to declaring that Telefonica is undervalued because your Spidey sense tingles or your chart tells you it's a buy.

Again, how long have you been investing in the stock market?

I bet you don't even own any stocks.  Am I wrong?

grantmeaname

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Re: Facebook IPO
« Reply #93 on: June 27, 2012, 08:59:23 AM »
You got me, I'm younger than you. I never considered it that way, and let me tell you, my feelings are just, like, way hurt right now.
Let's move on and address the actual arguments I've made in three separate threads that are currently sitting begging a response, shall we?

smedleyb

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Re: Facebook IPO
« Reply #94 on: June 27, 2012, 09:11:30 AM »
You got me, I'm younger than you. I never considered it that way, and let me tell you, my feelings are just, like, way hurt right now.
Let's move on and address the actual arguments I've made in three separate threads that are currently sitting begging a response, shall we?

Respond to what?  Your narrow conception of the world of stocks where nobody knows shit and where we should thus just blindly invest all our money in mutual funds so these hack managers can milk their 2-3% every year while everyone's IRA's stagnate if not fall behind do due to corrosive effects of inflation?

Again, you speak with such authority on these matters that one would suspect some "engagement" in the markets.  I put my money where my mouth is every day; I try my best, read and study as much as possible, and look to manage my risk.   I gave a play by play on how I approached trading FB, which proved remarkably accurate -- dumb luck, righ? -- in order to bring another dimension to the question: is FB a buy?

All I get from you or Arabespy are lame meta-market statements how nothing is knowable and we're all just dancing in the dark when it comes to stock speculation.  In Japan, folks have been investing their hard earned money in Nikkei index funds for more than two decades, and they got nothing to show for it but losses.  Before you tell everyone to dump all their money in the market -- especially into our market which is being jacked up by trillions in artificial stimulus -- you better know what you're talking about.


grantmeaname

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Re: Facebook IPO
« Reply #95 on: June 27, 2012, 09:21:03 AM »
Again, you offer vague criticisms that I know nothing about what I'm talking about without actually challenging any of my arguments. My authority comes from confidence that I'm right based on factual evidence.

I think Mr Mark, Skyrefuge, and Arebelspy would agree with me that your characterization of your FB predictions as uncannily accurate is a little bit generous. I didn't criticize your Facebook prediction, though, I criticized your Telefonica prediction. You know, the wrong one.

And while we're at it, it's not just your own statements you're mischaracterizing. The argument I'm advancing is that markets are efficient, which means that the value of stocks corrects based on public knowledge about them. In almost 400 posts on this site I have never suggested that people should invest blindly, that nobody knows shit, that anyone has any business investing in actively managed funds, or that anyone under any circumstances should put their retirement savings in anything with an expense ratio higher than .8%, much less an astronomical 3%.

Moreover, if the very best managers in the business, charging 3% expense ratios, can't consistently produce results better than the market movements as a whole, which you're arguing by calling them hacks, then why the hell do you think you can? You just happen to be so fucking smart that the laws of finance that bind the "hack" geniuses who run mutual funds for a living don't apply to you? Give me a break.

arebelspy

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Re: Facebook IPO
« Reply #96 on: June 27, 2012, 09:37:58 AM »
Many things move stocks.  The fundamentals of the company (profits, management), the psychology of investors (the duality of fear/greed), macro-economic forces (Fed turning on liquidity spigot), and "technical analysis."  Much of what Arebelspy refers to in my statements as "guessing" or "gambling" is the way in which my mental process assimilates all these variables to form an investment outlook; that outlook can be long term, it can be a matter of hours.  But my thoughts rely heavily on technical analysis when making a move -- for some, this is just a kind of weird numerology or hocus pocus investing.  For others -- Soros, Tudor-Jones, Paul O'Neil, it can be a useful tool in locating advantageous risk/reward opportunities.

Gamblers blow everything they go on long shots; speculators bet a percentage of their capital on the direction of markets --  be it Spanish stocks or real estate in Southern Nevada.  The smart speculators use sound money-management techniques (never put all your eggs in one basket; cut losses quickly); the dumb ones go all in and get blow out by the slightest market reaction.

Every time we buy any asset we hope will appreciate, we are speculating.  Especially when it comes to stocks.

I basically agree with this whole post.

And would add that said speculation has lost speculators many, many, many more dollars than it has made them.

So advising it to people is sketchy at best, if not downright disingenuous and misleading.
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arebelspy

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Re: Facebook IPO
« Reply #97 on: June 27, 2012, 09:44:12 AM »
All I get from you or Arabespy are lame meta-market statements how nothing is knowable and we're all just dancing in the dark when it comes to stock speculation. 

I don't think either of us have said that. Nor do I think either of us believe it. But it does make a nice strawman.

If you're doing some technical analysis, fine.  I may not agree with that methodology as a whole (even though I do think there is some practical uses for it). If you randomly post on message boards that a Spanish telco is a buy because "there's blood in the streets" with no actual analysis but just a feeling... Well then yes, we'd say that is not knowledge.

And even if it shot up 100% over the next 3 months, I wouldn't say you had knowledge, jut that you happened to be right on that one.

Prove it consistently over time. Start a thread, and post your trades. Not vague "I'd consider buying at low 20s" but actual trades. Make us believers.

Maybe you can actually do it consistently (which some can, but 97%+ lose).
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If you want to know more about us, or how we did that, or see lots of pictures, this Business Insider profile tells our story pretty well.
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arebelspy

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Re: Facebook IPO
« Reply #98 on: June 27, 2012, 11:19:27 AM »
In the other threads referenced in this thread, others have pointed out that we are unlikely to agree and the negativity is just causing harm.

My apologies for any negativity on my part.

We aren't really making progress, just causing ill will.

I'm going to lock up these threads. Anyone wishing to discuss further can use PMs. Any objections, PM me.

Cheers all!
We are two former teachers who accumulated a bunch of real estate, retired at 29, spent some time traveling the world full time and are now settled with three kids.
If you want to know more about us, or how we did that, or see lots of pictures, this Business Insider profile tells our story pretty well.
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