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.If you enjoy the content at iBankCoin, please follow us on Twitter