tag:blogger.com,1999:blog-8152901575140311047.post4608438852480874390..comments2024-03-29T05:33:33.027-04:00Comments on Musings on Markets: Market Mood Swings: Facebook EuphoriaAswath Damodaranhttp://www.blogger.com/profile/12021594649672906878noreply@blogger.comBlogger38125tag:blogger.com,1999:blog-8152901575140311047.post-34479845444364147562014-07-22T15:11:38.998-04:002014-07-22T15:11:38.998-04:00fine having nice information...
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Nice article. I was checking constantly thi...hiii <br /><br />Nice article. I was checking constantly this blog and I’m<br />quite impressed! Very useful information. Great Post and very good articles.<br />You are doing very good job, keep posting articles. I will suggest all my<br />friends to go this post. Thanks<br /><br /><a href="http://www.capitalstars.com/stockcash.php" rel="nofollow">equity tips</a>Equity Tips Stock Cash Callshttps://www.blogger.com/profile/09484649951533867072noreply@blogger.comtag:blogger.com,1999:blog-8152901575140311047.post-26468621261862507242013-09-28T02:13:44.824-04:002013-09-28T02:13:44.824-04:00Info is out of this world, I would love to read mo...Info is out of this world, I would love to read more.<br /><a href="http://noriskinvestor.com/" rel="nofollow">sanpete county tax lien sales auction</a><br /><a href="http://noriskinvestor.com/" rel="nofollow">tax forclousures auctions</a><br /><a href="http://noriskinvestor.com/" rel="nofollow">neuce county texas tax liens</a><br />Maryamhttps://www.blogger.com/profile/16963031774036961008noreply@blogger.comtag:blogger.com,1999:blog-8152901575140311047.post-22576629726219032322013-08-30T02:18:04.281-04:002013-08-30T02:18:04.281-04:00I will keep visiting your site often. This is a gr...I will keep visiting your site often. This is a great article thanks for sharing this information.<br /><a href="http://www.sumanfinancial.com" rel="nofollow">stock tips</a>Anonymoushttps://www.blogger.com/profile/13292711590844480880noreply@blogger.comtag:blogger.com,1999:blog-8152901575140311047.post-43915466919911365632013-08-30T00:50:57.788-04:002013-08-30T00:50:57.788-04:00Truly wonderful work… there is no messing about wi...Truly wonderful work… there is no messing about with your work, you get straight to the point that you're trying to make and you do it extremely well using simple and easy to understand language. Well done.Stock Tipshttp://www.capitalheight.com/noreply@blogger.comtag:blogger.com,1999:blog-8152901575140311047.post-66103069287590734542013-08-21T02:12:44.221-04:002013-08-21T02:12:44.221-04:00Do Europeans who don't have to pay capital gai...Do Europeans who don't have to pay capital gains tax, have an advantage over Americans who when making sell decisions have to take fiscal consequences into consideration?<br />Kind regards from Amsterdam. Ansgar John Brenninkmeijerhttps://www.blogger.com/profile/12649381157874260095noreply@blogger.comtag:blogger.com,1999:blog-8152901575140311047.post-6335760393997078922013-08-19T23:36:40.392-04:002013-08-19T23:36:40.392-04:00I often wonder how much return companies advertisi...I often wonder how much return companies advertising on Facebook actually make on their advertising investments. Like many or most, I don't recall even one ad I've seen on that site! Of course, this is no argument for not making technically based equity investments, but again like many, I have no feel for the real value of a company like this,e especially in the long run - if there is one!Keith Rowleyhttp://www.startsharetrading.comnoreply@blogger.comtag:blogger.com,1999:blog-8152901575140311047.post-14651725105848427902013-08-14T18:33:47.071-04:002013-08-14T18:33:47.071-04:00Do you think Facebook's new update will do any...Do you think Facebook's new update will do anything to change it? Kyliehttp://goldira401.com/gold-ira-is-the-right-choice/noreply@blogger.comtag:blogger.com,1999:blog-8152901575140311047.post-4880352283279248772013-08-13T16:57:01.707-04:002013-08-13T16:57:01.707-04:00time to talk about Apple, Proftime to talk about Apple, ProfAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-8152901575140311047.post-76624844217025736272013-08-06T10:33:18.337-04:002013-08-06T10:33:18.337-04:00Hi Prof.
Do you have an "excel" for Beer...Hi Prof.<br />Do you have an "excel" for Beer company as Heineken or Bud..?<br /><br />Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-8152901575140311047.post-47115114462385316462013-08-01T15:51:49.303-04:002013-08-01T15:51:49.303-04:00Great post Professor, always enjoy hearing about y...Great post Professor, always enjoy hearing about your latest ventures. Facebook is definitely one stock that I have been watching closely. John Franklinhttp://www.goldiraaccounts.com/noreply@blogger.comtag:blogger.com,1999:blog-8152901575140311047.post-28222853211275716772013-08-01T13:57:06.071-04:002013-08-01T13:57:06.071-04:00Anon,
I don't mind being called out at all. F...Anon,<br /><br />I don't mind being called out at all. Facebook is 3.9% of my portfolio. I wouldn't be uncomfortable with that position being larger. <br /><br />I understand your concern about how little data and logic I've presented. I'll just share a snippet from an interview I carried out a few weeks ago with Chuck Royce, founder of Royce & Associates. In his primary fund, he's beaten the market by 2 percentage points per year, dating back 40 years. He is a master investor and master practicioner. <br /><br />Paraphrased, he said this, "The numbers are an important part of the investing. But we find it very hard to gain a competitive advantage. The valuation models being run with a deep quantitative focus do not create substantial outlier returns after fees and taxes. The real area of opportunity is in qualitative analysis -- who are the leaders, is culture healthy and adaptive, what are the timeframes for decisionmaking, do employees return each year or is their high turnover."<br /><br />My work has Facebook with a run rate of around $1.5 billion in owner earnings this year. Before buying on July 1, I spent a lot of time trying to determine if 25-30% growth rates per year for 3-5 years are plausible. I concluded that they are. Zuckerberg and team did an incredible thing by force marching their entire developer team into mobile-first work. This was a massive undertaking, which took courage to pull off in the heat of an IPO with a lot of criticism coming their way. I believe you have a founder here who does not care about winning next quarter and is not focused on the year ahead. He has the vision, the equity stake, the voting control, the youth, and the ambition to focus Facebook 5-10 years out, and beyond. In my experience, this is an absolute necessity for a great growth company that you want to buy and hold indefinitely. <br /><br />John Mackey - Whole Foods. Howard Schultz - Starbucks. Jeff Bezos - Amazon. Jim Sinegal - Costco. Warren Buffett - Berkshire Hathaway. Larry Ellison - Oracle. <br /><br />Someone is going to have to show me the math on when were the best times for business-focused investors to buy and sell their stocks, from year to year. The vast majority of investors would do well to find these sorts of investments, hold them, and add to them on dips. <br /><br />I am rooting on some serious dips for Facebook. I hope the stock goes to $20, tomorrow morning. With an owner earnings run rate of $1.5B, 25-30% growth rates, excessive amounts of cash on the balance sheet, evidence that they have made the platform shift to mobile, and a huge market opportunity for commercialization with video. . . I believe the numbers and the narrative and the qualities of the culture and leadership support a valuation of $75+ per share within 5 years. <br /><br />The beauty of the markets is we will simply see if that is right or wrong. And as I said, in the end, we can both be right. The stock may go to $24, and then rise to $75. And we all get smile over lemonade.<br /><br />TomAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-8152901575140311047.post-33004013649270437702013-08-01T13:08:36.370-04:002013-08-01T13:08:36.370-04:00Thank you Professor, I truly value your contributi...Thank you Professor, I truly value your contributions.<br /><br />One question: when you say you're going to purchase put options, are you planning on selling call options as well? I would recommend you consider selling a call @ $38 strike (credit of $1.85) and purchasing a put @ $37 strike (debit $1.54) for a net credit of ~$0.31 ($31/contract). <br /><br />That way you're paying for your insurance by selling the upside and the max loss is $0.69 ($69/contract) with upside of $0.31/contract. Otherwise, by only purchasing the put you keep the upside but could end up paying the full premium of $1.85 ($185/contract). Alternatively, you could sell the $38 call and purchase the $38 put for a net debit of $0.28.<br /><br />Regards,<br />BenAnonymoushttps://www.blogger.com/profile/06182771993379552637noreply@blogger.comtag:blogger.com,1999:blog-8152901575140311047.post-68008279006482166232013-08-01T10:27:23.486-04:002013-08-01T10:27:23.486-04:00Nice work Prof.
You have logic and data on your s...Nice work Prof.<br /><br />You have logic and data on your side. Tom Gardner (the previous commenter) has faith and belief in FB and scant facts to back it up. If it were my own money, I would put most on logic and data and a little bit on faith. If it were other people's money, or I was just pontificating at no cost, well, opinions are...<br /><br />If Gardner believes so strongly in FB, I wonder if he would care to share what % of his portfolio he would put in FB. <br /><br />Keep up the good work Prof. I think you are lucky in timing too, however you are blessed with common sense for not buying the IPO and now thinking that it has run up ahead of itself. Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-8152901575140311047.post-22750751434139085872013-08-01T10:05:07.584-04:002013-08-01T10:05:07.584-04:00"I was prepared to be wrong for a long time b..."I was prepared to be wrong for a long time before the market came around to my point of view. I just got lucky on timing!"<br /><br />What does an individual investor do if they want to purchase LEAPS longer than 2 years. Most stocks don't offer options farther out than 2 to 2.5 years.<br />Apparently Cornwall Capital (from the Big Short) managed to convince brokerage houses to get them longer term options (that what was then available).<br />Apprentice of Agamashttps://www.blogger.com/profile/00336510029421716346noreply@blogger.comtag:blogger.com,1999:blog-8152901575140311047.post-90847557883708578152013-08-01T09:14:24.170-04:002013-08-01T09:14:24.170-04:00No Luck
PURE PRO
ThanxNo Luck<br />PURE PRO<br /><br />ThanxAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-8152901575140311047.post-25571411412810995352013-08-01T06:34:24.810-04:002013-08-01T06:34:24.810-04:00"So why buy puts with expensive premiums inst..."So why buy puts with expensive premiums instead of selling covered calls"<br /><br />the premiums will not be a real problem if FB rises a lot. <br /><br />If FB falls, you have put options.<br /><br />If FB stays flat and you are ready to sell it, you can still sell at-the-money covered calls to get back the premiums you have paid for put options.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-8152901575140311047.post-39258632897084582662013-08-01T06:02:41.343-04:002013-08-01T06:02:41.343-04:00Professor,
Long-time listener (and admirer) of yo...Professor,<br /><br />Long-time listener (and admirer) of your work, first-time caller. As usual, your blog post doesn't disappoint, but I would challenge one thing you wrote:<br /><br /><i>The old "buy and hold" advice, where we are told to buy good companies and leave them in our portfolios for posterity, makes little sense with growth companies, where markets often over shoot and under shoot.</i><br /><br />Over the years, my investing experience has taught me that "good companies" with lots of potential to grow are exactly the types of companies investors should be buying and holding. Here are 3 reasons.<br /><br />1. Quality trumps quantity over the long term<br /><br />Our models are inherently inaccurate. As Yogi Berra famously quipped, "It's tough to make predictions, especially about the future." And it's even tougher to create accurate models using those predictions.<br /><br />That doesn't mean we shouldn't make a model. But I think it's important to understand that good companies with lots of growth potential tend to have more options for growth than we may be able to see and model. And investing in quality companies at reasonable prices over long periods of time tends to pay off handsomely.<br /><br />2. The market rewards the value creators<br /><br />The market's mood will almost certainly swing from euphoria to despair and back again. But the market tends to reward companies that create value over long periods of time.<br /><br />Yes, it's easy to look back and see who the winners have been and how much value they have created. And yes it's hard to predict which companies will be the next great ones. But if investors find companies that show signs of being a long-term value creator (serving big markets with differentiated products and/or services, having a sustainable competitive advantage that leads to excellent ROIC, and quality management, to name a few), they should be willing to give the company time to work and grow and pay less attention to the market's swings.<br /><br />3. Remeber George Costanza<br /><br />One of my favorite Seinfeld episodes is when George's character decides to do the opposite of his instinct because, as Jerry says, "If everything you've had is wrong, then the opposite must be right."<br /><br />A powerful force that investors must contend with is the Disposition Effect: the propensity to sell shares whose price has risen and hold on to shares whose price has fallen.<br /><br />I won't say that investors should never sell stocks that have risen. That's ridiculous. But investors should recognize that the Disposition Effect costs them money over time. So in some cases, investors should consider doing the opposite of their instincts.<br /><br />Thanks for listening, keep helping investors, and I look forward to you next blog entry.<br /><br />David MeierAnonymousnoreply@blogger.com