My Portfolio in Video Form

This video reminds me of my portfolio. I am the fireman rushing from stock to stock to put out fires.

Most fires have been of the small backyard variety but I have had some multi tenant highrise torchers as well.

Sometimes the market works with you, sometimes against you. Lately it’s been against. Here’s to a better 2013.

VMW: Stay Within the Lines

VMW has been range bound for ~2 years. How range bound? It’s imitating the basejumpers in this video going up and down a tower in Kuala Lumpur over three days.

Buy at 87 and sell at 95ish will be my game with VMW.



You know nothing John Snow (FB and YELP)

A few weeks ago there were several IBC blog posts bashing FB and YELP. I should know, I wrote several of them.

Look at them now. FB is up more than 20% since June 1. YELP up for 50% gain.

RaginCajun and ChessNWine opened and closed FB positions. IBC blamed FB for everything from egregious stock losses to impotence. There was no more unpopular stock than FB at ~$26.

Let’s be honest, this is a Costanza market. When there is that much hate for a stock step back, clear your mind and consider: is this a buying opportunity? Buying the blood would have been extremely profitable here.

Never catch a falling knife you say? Well, I think these stocks were hammered on sentiment. Moods change faster than fundamentals. Negative news can fade quickly. Long term I maintain FB and YELP are not buys for my style, but looking back I can see where I missed a huge opportunity.

Hindsight is 20/20, but sometimes history repeats itself. If you fail to see that pattern repeatedly you are not learning.

Buying those stocks at the same time I penned missives outlining their flaws would have been hard. But there are times that’s exactly the right thing to do.

Sometimes we’re all John Snows in this market.

Stick a Fork in $YELP

Google just added a “Local” section to Google+.


Partially true. Today. But the people that matter do (the early adopters), and the rest will follow. Google has a long term plan to organize the world’s information. Ever use their search? They seem to be doing a pretty good job of it so far.

As far as users, the yardstick by which these services are measured, Google reviews are already integrated into Google Maps, which people use everywhere. Works great on mobile.

(EDIT: Just found out GOOG bought Zagat. I did not know this and so changes some of the angle of the rest of this post, but I have not edited anything from the original)

YELP put up a fight when Google began integrating YELP reviews on Google services. I am not sure if that’s still being done, but if it is and I were YELP I would encourage it…hoping one day I could marry my baseborn children to the regal house of Google (no Lannister).

Sure, YELP has mobile apps. But YELP is a one trick pony while Google + is a darkhorse. The kind of horse that sneaks up in the middle of the night and violently horsesexes other Internet companies.

The Social Media party is over. There will be contraction. Labeling yourself as “Social Media” is the 2012 equivalent of being a dot com. Social Media will no longer be a special term, it will be part of life and any added value will disappear. The bloom is off the rose.

The Internet is king. User experience is king (no AAPL). Access anywhere is king. Google is all these things. All hail the King.

YELP won’t die today, but the writing is on the wall. If they are smart they’ll be YouTube and cash out so they can smoke Rick Ross blunts rolled from the flayed skin of their competitors. Hopefully, YELP won’t channel GRPN who has teetered from one near death experience to another a la Gary Busey.

I’m not a buyer based on a buyout, but I think it’s YELP’s best future hope for investors and their own longevity to be an arrow in Google’s quiver.

The time is now for YELP to make that move.

Only Happy When It Rains

As a confirmed bear shitter in King Le Fly’s court I am making efforts to retain my top hat during this market swoon, covered in burlap as it may be. However, I will not expose any additional funds to shorting the market. I am already in over my head and bailing water from Q1 2012.

Yes, I got net short before the epic takeoff of Q1 2012. Fuck you very much.

However, I have one pick I believe will be monstrous over the long term: GOOG. It’s everything YELP, FB and others pretend to be and more.

GOOG is the Internet. People just don’t get it. With newly available Chromebox and Chromebooks GOOG takes another step into complete domination.

I will flesh this idea out when time permits. For now I’d love to see GOOG swoon with the market below 500. I would be a big buyer.

In the meantime, here’s an anthem for the few bears on IBC.

This is where Facebook Works

I run a consulting business. For me, FB is a blackhole of advertising dollars.

I have an artist friend who draws robots. His advertising dollars on FB have resulted in 10’s of thousands of page fans, customers from Europe and Asia and a very significant bump in revenue.

FB ads are great for that type of niche player. The deep personal dataset that FB has about it’s users can identify jackasses who would buy robot paintings from across the globe, greatly benefiting my robot drawing friend. GM is getting shit canned for backing off on FB ads, but it’s just a result of the fact that GM knows FB ads don’t work for selling cars.

But, if you sell robot paintings FB is awesome.

Does that make a company worth $100 Billion?

On a related note, I caught up with a colleague I hadn’t seen in a long time. I asked how business was going and he told me he has switched jobs. He now does “Facebook consulting”. Intrigued, I sat with him for an hour and asked questions. He told me that being “liked” on Facebook is the best customer marketing drip campaign tool available. He estimates a “like” on FB is worth 10x the value of someone’s email address.

Here’s how Likes works as a basic formula. You are friends with “thefly” on Facebook. Fly likes the page of my friend who draws robots so now he receives robot updates in his stream. Fly then likes a robot drawing. You see that in your stream and since you know and like the Fly and have a passing interest in robots (I mean, who doesn’t) you are more likely to look at the pic, reshare, follow the link etc. It’s a 1+1=3 type scenario. Your friendship with Fly plus everyone’s passing interest in robots = 3x more likely to gain your attention. Add a request for action and that doubles. It all starts out with Fly “liking” the robots page. This is why you see LIKE buttons on every web page and at many local businesses. Look around, you’ll see LIKE logos/buttons are everywhere.

Additional FB marketing tips from our conversation. Using pictures in posts are far more valuable than a plain text update. If you can use a LOLCAT in your marketing or with your product, you’re golden. GM’s best FB tactic would be to poster their new cars in LOLCATs and put them on FB. They would get instant 500 Million “likes”. People fucking love cats.

Other stupid basic psychology, posting a pic with some text resulted in X number of “likes” and shares. A month later posting the EXACT same pic and text along with “Please share if you like this post” resulted in 10x the number of shares. People are really that checked out when using FB. A simple request results in high compliance. The Psychology of Facebook would be an interesting read.

I have bashed FB in several posts. I felt it was time to give them credit where it’s due. FB ads are very effective for the right niche. The problem with the IPO is that few people understand that niche and how to put a valuation on it.

Facebook Crackheads

(This was drafted Thursday night before the IPO.)

At $38/share FB will be valued at $100 Billion. That is 1/10th of ONE TRILLION DOLLARS.

Supposedly FB has ~1 Billion users. That means each user is worth $100 (at $38/share). If a click through on a FB ad is worth $10 to FB then each user would need to click on 10 ads (timeframe irrelevant for this example).

I believe in my 20+ years on the Internet (Yes, I had dial up AOL. Shut up.) I have clicked on less than 10 ads.

Someone please tell me how this does not end poorly. IMHO, it gets even worse because the boy CEO who blew $1 Billion on Instagram is still firmly in control.

The Social Media / also rans have similar issues. My one Internet pick is GOOG. I will write more about GOOG in another post.

$FTNT on watch

$FTNT is down in sympathy with $CSCO. Looks like it just broke the bottom of a channel with support around 20.

I will leg into a position starting around 22. Strong management (Ken Xie who sold NetScreen to $JNPR for 3.5B), good recurring revenue subscription model and Gartner Tech Quadrant leader. $FTNT is the real deal. I like their story and I like them around 20-22.

NINJA EDIT: If $HPQ could have kept it’s shit together I think they would have made a play for $FTNT.

How I Feel About Your Face(book)

Facebook says mobile users will hurt their ad revenues the same day they announce a Facebook App Store.

Why an App Store when Facebook admits that the mobile experience is becoming the default experience for users (a MOBILE experience that is decidedly not Facebook friendly)? Because once a dumbass Facebook user signs up for an app, that app has access to their information AND every one of their friends. So screw the user experience, let’s focus on sharing your information and profit! It’s called digital sharecropping and as long as the user feels the good outweighs the bad users will ignore the downside. Once Facebook goes public and they can’t hide the devious shit they pull people will get a clue, then it will be gameover. Facebook is a game changer all right, a game changer for privacy.

Facebook is the AOL of 2012. It’s trying to be the Internet, but it will fail and it will fail spectacularly. Apple and Google have App Stores. Facebook, you are too late and you suck at life. Fuck off with your half hearted attempt at a Facebook App Store so you can snoop on our friends and steal our information.

The Facebook IPO will be laughable. Either as a DOA basket case of a stock or as the straw that breaks the global economy back.

Scared yet? You should be. Oh, you should be.

This is how I feel about Facebook.