The social media topic and investment opportunity never ceases to amaze me. I was uber bullish on the space, back when YELP sported a market cap in the private markets of just $500 mill. Everyone was excited, heading into the Facebook iPO, then calamity struck.
I was amazed at the carnage by the “leaders” of the social media space, namely ZNGA, GRPN and FB. All of the homeless people who circulate on Twitter had called for this destruction, based off something inside of their heads that makes them hate success. But they were right. My large investment in YELP went from $30 to $12, ZNGA, GRPN, FB collapsed and every name in the space dropped by at least 25%.
Back in 1997-98, I was researching and buying internet stocks, before it was popular. No one believed in them yet and the shares were thinly traded and heading lower, until the renaissance of speculative investing was born in 1999, lasting through 2000.
We are a similar situation today with social media stocks. However, the big difference is they are making money or close to it. The dot com era was riddled with names that meant nothing. Buzz words, such as “B2B” and “eyeballs” ran rampant Henry Blodget was the guy atop the roof yelling “buy.”
Now Henry resides at the helm of a different roof top, in charge of the best financial news site on the internet. Internet stocks are all the rage again, and slowly but surely, investors are starting to believe the hype.
Have a look at my social media index, found in The PPT.
It doesn’t even matter if this sector drops 30% from present levels. All of the bozos out there screaming “bubble” missed out on a huge buying opportunity. More than that, you will continue to miss out on future gains because you’re too stubborn to accept what is staring you in your face.
Fresh highs and new buyers come into the space every single day because it is, without a doubt, the best place for growth, hands down and bar-none, in the world.
Chalk up another L in your column, friendo.
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Understand this, pal. Objects in motion tend to stay that way.
u r a genius. face it all your calls r correct. you have a connection with the gods. but hubris will be your down fall.
The Fly IS God. I wouldn’t bet on a downfall.
lmfao
SO what is wrong with hubris, if you’re right, NOTHING! except it will get you kicked from some little Stock Tweeting websites. Unless you have your own site. Thanks for the idea!
Thanks for the top call. I will be looking into shorting some tomorrow.
This social media run up is ALL from FB announcing better than expected revenue numbers from mobile.
The biggest question and black cloud over the social media space in monetizing mobile usage. If they indeed figured it out, then yes the future is bright.
I’m still skeptical because people hate ads on their mobile devices. Who have you known to fall or click on one?
What this proves at the moment is the time to buy a stock is one everyone else won’t touch it with a ten foot pole.
In the social media world, I’d segregate the services into those that function primarily to consume time and those that function to save time or enhance our ability to achieve some objective.
I believe that the time consumption products face not only unlimited competition, but also a fickle customer base that will ever be searching for something new. ZNGA is the poster child for this category. I’d avoid the category unless I was sure I was catching something that was still on its way to peaking in popularity.
FWIW..my take..Continues (even though futures are flat right now, lol)
Trading diary Aug 12, 2013…Dollar has to hold it’s line…Sell Off Continues (even though futures are flat right now, lol)Tonight CBS 60 minutes did a story on an update of China’s Ghost towns of Apartments bought, but empty..this is so unhealthy for a Country imho. Anyway tonight Japan disappointed with their GDP data which missed. The USD/JPY is at 96.44 in the Asian Session, not much of a belief of more arrows out of Abe on the data. Gold is strong tonight. 10 year is sitting where we left it at 2.58%. We are watching the DXY today to see it hold it’s uptrend line we have had. Today we get light POMO buying. Eur/USD sitting at 1.3328 a tad down, Aud/usd at .9202, which along with Oil is flat. Shanghai Comp is up tonight with rumors that CHina Govt will allow developers/miners to sell more shares, this is also helping Copper get a bid, with other Materials on Shanghai Futures. Nothing much in econ data for today. Tuesday we get Fed Lockhart speaking, he is fan of tapering in Sept.
To those who hate on Social Media – don’t hate yourself, hate your entry. It will go up in the current environment until it pops. You will make money.
Am I the only one confused that he called Business Insider the best financial blog out there?
YELP seems weak,,, anybody buying here ?
Someone has a MASSIVE line at ~50.90 on YELP. It bounces off of there like it’s been hit with a stick.
Is YELP a sell here ?
Fly, I see that Josh The Reformed Broker gave you piece a shout out today. I like his read list.