Young Gun

You Never Got It And Never Will

Supposedly Facebook has recently dressed up to attend a black tie event. This event was invite only and I did not get an invite. Supposedly Twitter was invited as well and chose to unfashionably wear Chuck Taylors? If you were as confused as I was when I first read this article then you have come to right place. What makeup and dress clothes are being spoken about, when did Facebook get dressed up? All I have seen over the past few months is a company that disregards Wall Street norms in so many different ways. Zuckerberg plays his own game resulting in a traumatized stock price, long-term investors jumping ship, and a retail investor on the hunt for his scalp. Have you ever heard of the creme de la creme of a sector come to market and destroy the whole sector? Well you hadn’t until Facebook Faceplant came about. Had Facebook truly dressed themselves up, we would not be in the predicament we are in.  No, Facebook has not dressed up, in fact, they continue to play by their own rules, which may be one of the reasons why they prevail into the future against all lousy expectations.

I argue that Twitter is more likely to fall by the wayside MySpace than Facebook. For example, the time required to set up a Facebook profile and building that identity is not an event that happens overnight. This identity building journey is a summation of years. That is why Facebook created the timeline, to allow users to tell their life story. Obviously they are trying to make Facebook a pillar on which we convey our life, dreams, and past experiences. In turn making it a substantial attribute of our day-to-day in the 21st century. Anyone who has used Twitter knows that they have a spam issues that they have failed to fix. Anyone who uses Facebook knows that they have a “like” issue they are currently dealing with. The list of faults goes on, but to say that one may be better than the other at this point, now that’s questionable, especially in regards to the critiques our expert raised.

Another issue that the article raised was in reference to businesses and how Twitter lends itself to helping businesses be more successful. Of course this failed to mention the fact that small businesses can flourish via Facebook. I personally know many small businesses that have utilized Facebook to the betterment of their overall business. I have seen large businesses utilize the Facebook platform successfully as well. Just ask the execs at Red Bull how life is in their Facebook world, they would most likely reply that Facebook gave them the wings necessary to fly even higher. In regards to advertising, do you really think that tweet from Starbucks results in me buying an extra frappe? Come on now. I am more likely to look at an eye-catching advertisement on Facebook than Twitter any day. Why you ask? The experience that Facebook ads offer allows them to easily catch the attention of the viewer. The page full of information and the experience that a Facebook page lends the user, garners the interest of the public much more than a twitter profile any day. Not only that, but the vast information that Facebook has compiled lends them the upper hand in any monetizing game between the giants.

From an investing standpoint, all we care about is the monetizing potential of the product.

In the previously mentioned article, this fellow implies that he uses Twitter. That’s great, I use Twitter also. Has anyone thought for a second that he may be the exception to the rule? That his personal relationship with the product should not summarize the whole market for that of Facebook or Twitter. Maybe he works in the markets or marketing, spending a lot of time on Twitter due to his career. I never buy or sell a stock based solely off of one personal experience. I do take my personal experiences and expand on them, ensuring they are a sound investment. Yes, when Zillow became public, I had interest in the company due to my experience with it. Though I did not put my money where my mouth was until I had taken my personal experience and dug down with research. At the end of the day making investment choices because your personal experiences suggest that it will be the right call is mere tom foolery, your personal experience may result in being the exception to the rule, resulting in you loosing an exceptional amount of money.

If you think of Twitter as the most relevant news source, being one of the few sites that allows for instant gratification, do you really not think that Facebook will run a similar scheme? Obviously if it works, is profitable, everyone is going to implement it. So don’t think for a second that if twitter become the source for news and entertainment, that Facebook won’t do it better tomorrow.

By summarizing his point he implies that Facebook will die in 10, 15, or 20 years and Twitter will remain relevant. Are you kidding me? Who’s to say that twitter will remain relevant in the next 20 years. He implies Twitter does not need to change? Really? Ask Apple if they ever needed to change, and they would reply, change or die. Ask any technology company today and they would all reply change or die. Who’s to say a better alternative to Twitter won’t come around. Who’s to say that alternative isn’t Facebook itself. So Twitter supposedly will prevail because it’s “in” and used by the younger generation? You’re correct, Facebook will fail because my mom uses it and all her friends. It will fail because Wall Street hates them. They will fail because the have a massive user base. Blah blah, we have heard it all before. Even if Facebook falls by the wayside, which it may, have you ever heard of Google? Yes, that giant company that transformed themselves into something much, much more than a search giant. So if you sold because of the said article, not only are you foolish, you fail to see the potential. So you keep thinking that since Facebook doesn’t have a FaceDeck the end is near. A social media company is about the entire user experience, the connections, the way real world relationships are advanced through technology, and Facebook has had a monopoly on that for nearly a decade.

He finished his article suggesting that if Twitter has an issue monetizing itself, it can easily be solved with the help of LinkedIn. Last time I checked all social media companies are having an issue monetizing their sites. So in fact Twitter and Facebook are in the same boat. In fact Facebook and Twitter offer two different forms of social media. In fact they both can survive and prosper because they have developed their own niche. Though many of you wouldn’t understand the niche that each of these companies sit in, because the closest thing you are getting to the younger generation is referencing it.

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Google Me That (Tablet)

Yesterday on the Google homepage, as I was searching for all the answers to every question ever posed, I came across an interesting image (pictured below). It was a monumental advertisement that suggests interesting game play among the tablet makers in the coming months. The tablet mentioned in the advertisement was launched some time ago and can be considered old news. I am not concerned with the divergence between Google and Apple at this time, rather, I find it more interesting that Google just shot a warning blast over the bow of the S.S. Amazon. Google, a company that embodies technological brilliance, first made their move in the tablet market through partnering with Amazon. Today they seem to have put aside that Amaz(on)ing relationship in lieu of their own agenda. Google, one of the kings of tech, may have just made the move to push them to the forefront of the new tablet economy.

The first and most obvious stab at Amazon can be seen in the price point. For under $200 google has launched a competitive and superior product. Why is this product superior, you ask? Simple, it embodies Google, it is the first true Google tablet and that is why it is the first to bear the glorious Google name. This tablet allows them to do what they do best, make an operating system employing all aspects of their network. Have you tried to access your Gmail on a Apple device? It does not offer the same ease of use that an android product fosters.  One of the strongest points that Google offers is that its tablet have the “made for play option,” which means that your gaming, apps, and so on are right at your fingertips when you are using your chrome browser or your Google tablet, they are going towards an interface resembling that of Apple.

What it really comes down to is that the Kindle was the Guinea Pig for the Nexus, and the Nexus is undoubtedly the real thing. One of the real strengths that many overlook when it comes to any mobile device is the sheer impact of YouTube. Being that YouTube is an entity of Google, any google product will perform better when accessing this entity. I can go on and on about why the software is better or why the camera facing the user will up the desirability of the project, but if you ware somewhat educated with the ins and outs of google you already knew that. What many have failed to convey is that this dramatically changes the relationship between amazon and Google. Google recently remember that they are a giant in the arena of technology and Amazon is a runt when it comes to anything besides selling goods off of their website. Don’t get me wrong, I like Amazon’s business model, but I prefer putting my faith in Google when it comes to producing amazing one-of-a-kind products.

If you followed the Chromebook story in any shape or form you know that it was considered a flop. The kindle fire can be considered a semi success. When evaluating the potential success of the Nexus, one can only assume from the information given above and the many outside factors (the success of the android phones) will only serve to push the Nexus to the next level. The Kindle Fire, the only decent competition to the Apple iPad product, only took a 22% market share. Imagine if Google could take the follies of their previous products, the Jelly Bean operating system, the new integrated play feature, and combine all those with their community of Android die hard fans and propel themselves to a strong second seed in the tablet market. This could be Google’s moment.


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Apple Bank: Open Again For Business

During the first half of the 2012, Apple could be described as none other than a bank. A Bank in which investors’ money was safe and offered a high rate of return. For some time I have been leery of Apple, not because the company doesn’t differentiate itself as one of a kind, rather, more headwinds are outshadowing the once strong tailwinds. As I spoke of recently in the article Apple Finally Challenges Itself, the future of Apple remains more questionable than ever before. I seem to be in the minority on this subject as the stock price soars higher and higher. From an investor standpoint, I believe the best step to making a calculated decision with Apple is to follow the pack. Being aware of my previously mentioned bearish sentiments will head you well as we round the 4th quarter, but nothing stands between us and a revolutionary product launch. The investing populous believes wholeheartedly in the Apple platform, scoffing at those that attempt to replicate or recreate it. As the recent court case concludes in Apple’s favor, the legal system also belives that the Apple products are truly one of a kind, and will not allow them to be replicated. This all results in the Bank of Apple reopening its doors and giving bank members a one-of-a-kind banking experience.

I often get caught up in looking too far ahead, as I did in my article linked above. What the market currently desires of Apple it is receiving handsomely. The hope, the potential for another revolutionary product, propels the stock higher. Looking back to last year when apple disappointed investors with a mediocre product, the iPhone 4S, the stock sold off hard. This time around, we expect a revolutionary iPhone 5 and we, the Apple-addicted populous, will get nothing less. Yes, Apple faces numerous headwinds in the coming months. Yes, Apple is challenged with launching a premium smartphone that will have to remain premium for the next 2 years. Yes, Apple may fail to win over tech heads with all of its products to be launched this year. Though the market currently loves Apple, like a fat kid loves cake, like Steve Jobs loved LSD (do your biography reading bro), so as I learned the hard way, don’t fight the trend and sign up for the Apple bank.

Photo by Sean MacEntee


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Sunday Funday: Diageo

Blending the perfect concoction of fun and profitability Diageo remains the perfect play for our questionable economy. When a recession comes through in any shape or form consumers want to cut back, have to cut back, and in some cases, must cut back. Luckily for Diageo, these consumers that now battle the masses at Walmart instead of shopping for premium products at Whole Foods still get drunk to drown their sorrows. Not often does one come across a company that has an established presence and still exhibits growth. As the premium public traded company in the booze industry, Diageo will do nothing but raise the spirits of your portfolio.

The reasons I feel this brand stands out compared to the others in the sector is Diageo’s all encompassing list of brands. No matter if we see an uptick in Vodka sales or that of Scotch, Diageo has set themselves up to make money off of the drinking public. Not only that, but if we see trends switch to supporting that of beer or liquor, Diageo still has the ability to profit from the ever-changing consumer. Few companies put out the same quality products year in and year out like Diageo. Johnnie Walker, one of their premium scotch beverages, has been around for over 200 years. When I take a look around the stock market, I don’t find many companies that can advertise such a rich history as one of their strengths. As goes with their rich brand history, brand loyalty is prevalent as well and was a key strength during the recent financial crisis.

Looking back at this giant company of sin, we see a company ripe for the future. Having made it through the financial crisis on the backs of their brand loyalty, they sit tall upon their intoxicated throne. Their desire to reinvent and continue to improve on their business stands out. Just take a look at another one of their premium liquor brands, Ciroc. Ciroc differs from other premium vodkas because it is derived from grapes rather than methods of yore. Though Diageo stands on the back of its established brands – doing so smartly – their ability to innovate shows their long term potential by not allowing their liquor brand book to stagnate.

However you wish to break down Diageo, nothing but quality emerges. As their recent earnings release showed, they are taking the emerging markets by storm. So be it through building new brands through innovation or relying on past success, Diageo is one of the best Sunday Fundays thus far.

What is Sunday Funday?

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Who Really Has Your Back?

Over the past few months I have read  innumerable articles dealing with venture capitalists and the social media experiment. I do not know one person who has not covered the topic and shown it in a relatively negative light.  At first I was skeptical of the masses’ gloomy opinions of the entrepreneurship of our generation. Today, all that changed, I was sitting in a talk by one of these entrepreneurial elite and this fellow proceeded to slap me in the face with the negative realities that I had so fervently tried to avoid. The loyalty of these new and young CEO’s lies not with the investing public, but rather with their buddies, the venture capitalist. I had once thought that their loyalty could lie both with their masters, the venture capitalist and us, the investing public. Today, however,  his presentation combined with the destruction in social sector over the past few months showed me the light. When I see the decimated stock prices in the social media sector, when many are calling this the tech bubble 2.0, pointing fingers and blaming someone, I finally see the forest for the trees and now question the CEO’s that I put my money behind.

The fellow, who will remain unnamed, that I heard speak today shocked me. He felt accomplished, maybe because he was not negatively affected by his decimated stock price, because he had made his money in the companies heyday. Maybe he felt accomplished because he had succeeded in the technology space. In his opinion he succeeded. In my opinion he failed. This discrepancy stems from the lens in which I view the situation. I see a guy who screwed over many investors and walked away unscathed. He sees himself as entrepreneur who can and wants to do that again. No loyalty. No sense of responsibility. And that bothers me. Though his company failed, at least in my opinion, he walked away with funds and stated that his venture capitalists all made a hefty profit. He felt good about the fact that he made many men rich but never spoke once of the investors left to suffer. I for one could not believe my ears. Who runs a publicly traded company and does not feel an obligation to the investors that put their money to work in his companies? The heart of the issue lies within the mentality of these entrepreneurs of the younger generation. These men and women have put their allegiance with the venture capitalist community, the people that gave birth to their experiments, the ones who will give them another chance in the years to come. Their allegiance does not lie with the investing public where as the older companies (Apple, etc.) live and breathe by their investors.

Just like I have mentioned in many of my previous posts, it is crucial to know your CEO. In this particular situation, it is crucial to know where you CEO lies in terms of his or her  loyalty. As I have seen in the past few months, many of these newfound CEO’s just don’t have the back of the investing community. I have seen it repeatedly over the past few months: stock prices cut in half, and these CEO’s can’t even give even give the investing public the time of day. Where is the reassurance for the markets? Where is Zuckerberg telling the people that he will monetize mobile? Why don’t these CEO’s have our back? As you have most likely heard over the past week, many are calling for Peter Thiel to step down for the simple reason that he no longer has Facebook’s back. This issue has been beat to death. In the simplest forms, I will refraining from hoping and praying for a recovery in the sector when it comes to these new technology companies until I am assured they have my back. I would like to see nothing less than to see Zuckerberg sending Thiel packing. Just as I have wished that Zuckerberg would have stepped into the public eye of investors and calm those that have their money with him.

I spoke some time ago and analyzed this mess in a different light. I suggested that if social media failed then they could buy their way into the next round of successful technology companies. In my eyes this still holds true. My belief in the ideals and potentials of these companies don’t mean anything. Until the CEO’s can come down from the clouds and show us they have our back, we are lost. Rather than running from faltering companies as the above individual whom gave his presentation did, these CEO’s should instill hope and faith. Faith that insures if their business model falters or slows, they will change said model. If these companies are going through a transition period, which I believe they are (you know, monetizing mobile, I am sure you have heard something about it), then they should let us know and inform us. These CEO’s don’t say or do anything and the investing public sees the end of these companies only months away. Obviously the end is nowhere near, mobile continues to show astronomical growth, and the masses will socialize with each other via texts and social apps for years to come. Though as investors this all means nothing if these CEO’s don’t show us, the stock people, that they have our backs.

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