“You hear the sound, you wait around
and get the word, You see the picture
changing everything…”
I’ve built up my Twitter position to about half where I want it to be, so I’ll probably do a little more scaling in next week to round it up a bit more. But after my latest small nibble tranche done here this morning, I’m going to push pause and wait for the next tranche.
I was a pretty big bear on Twitter in the months immediately after its IPO. I explained in Twitter IPO a “debacle”; $1.6 billion left on the table that management had short-changed long-term investors from the start. And later, in Why we own Facebook and not Twitter, I explained that while Twitter was dinking with the colors of their old website, other social networks like my Scutify (Cody Willard is the largest shareholder in Scutify‘s parent company, Wall Street All-Stars) are out-innovating Twitter. And finally, in Twitter is all but doomed, I explained that I had pretty much lost all faith in Twitter’s management’s for their lack of vision for the future.
Well, one of the most important traits of a good investor is the ability to change one’s mind.
Even better is that I find that I’m changing my mind just as everybody else is now starting to agree with what my analysis from months ago. That gives my newfound bullishness on Twitter a contrarian-edge to it, and being a contrarian is usually a good thing in Revolution Investing. I happened to catch Jim Cramer on SiriusXM earlier this week as he was basically calling for Dick Costello’s, the CEO, of Twitter’s head. Lots of piling onto that call now on Twitter itself (ironically?).
I have changed my mind on $TWTR itself and on their management’s ability too as the last couple quarterly earnings reports showed some serious growth. I think most anybody can figure out how to monetize the billions of pageviews and promotions that go on Twitter every month. Likewise, I have a contrarian take on the news today that Jeremy Gordon, Twitter’s head of product engineering, and Adam Kinney, a four-year veteran leading the analytics group are leaving the company. I thought that sounded like good news as the company can hopefully put people in place that will accelerate growth, monetization and innovation.
Meanwhile, lost in today’s news is the much more important fundamental development that Twitter and IBM are partnering to build their own enterprise applications to help businesses make informed decisions. TWTR will give IBM access to all of its data from the start here and I would expect to see a new stage of growth ahead as Twitter embraces its Big Data capabilities.
Which is the better buy on the dip, $FB or $TWTR? For a trader, say over the next 3-6 months, I’d guess Twitter’s got more upside from today’s quote. For an investor, say over the next 3-6 years, I think that Facebook has more upside from today’s quote. After Twitter’s big hit this week, I’ve started scaling into a full Revolution Investing position in it. Facebook is a much bigger position for me personally, as I had loaded up on it in the $20s a couple years ago and still own most of that position at big gains now.
I think both Facebook and Twitter have a lot of long-term upside as they grow their average revenue per user and create new revenue streams from all the data and real-time information their users create for them.
Finally, I was interviewed by Marketwatch’s own Ken Roberts in a long 30 minute detailed discussion about the future of social networking what Revolution Investing is and other topics.
