App Bubbles, Gold Struggles and Elon Musk is on welfare
Remember that one of our main objectives and rules is to take what the markets gives us and let it dictate how and what we buy and sell. Long-time readers have seen me buy panics/dips and trim on euphoria/rips much more aggressively than I have of late, but that was partly because I had more confidence in the lower prices/valuations and in the part of the cycle that we were in for the markets at those times in years past.
I will be aggressive in trading like that again, when I think the risk/reward is most desirable. The markets are not giving me the confidence to make those kinds of broad and aggressive buy-the-dips and sell-the-rips kind of moves. Heck, we’ve been without a serious 10% or more decline in the markets for years now, and that’s what would likely get me more serious about a buy-the-dip/sell-the-rip kind of approach.
Let’s hit on some very important themes and headlines that confirm and/or challenge the investments and trades we are working on, then.
What’s up with that WhatsApp deal? – $FB pays $20BB for an app company. Uh, welcome to the App Bubble. Search Marketwatch for “Cody App Revolution” and you’ll see hundreds of articles of mine from as far back as 2009 pleading with investors to get in front of the “coming App Bubble”. (See for example, A once in a lifetime opportunity for investors, entrepreneurs and prospective employees Nov. 1, 2010.) And that’s in large part why I love $FB‘s acquisition of the makers of the WhatsApp app — because I own Scutify.com and our apps, and we just might be the fastest growing communications platform app on the planet right now, probably even growing faster than Whatsapp itself.
Facebook shares drop on $16 bln WhatsApp deal – At the $19 billion price tag for WhatsApp, that means $FB paid just about $40 per user. Actual active user base is much smaller than that, so figure $FB paid $100 at least per user on this purchase. That ain’t cheap. Then again, Comcast paid more than $4000, or 40x the Facebook/WhatsApp price, per subscriber in acquiring Time Warner Cable. Of course, cable subscribers pay a lot of money each month and generate a lot more cash flow than WhatsApp customers ever have.
Hong Kong gold exchange eyes 1,500-tonne warehouse in mainland China – Gold’s got so much attention right now and the “breakout” and “bottoming” that goldbugs have long been waiting for since the crash from $1900 sure COULD finally be in. BUT, couldn’t you just see the big banks out there who are running the paper gold and gold ETFs do one more 5%-10% crash, at least in their $GLD prices, that would shake out the newfound holders of their gold one more time? I could. As I’ve said for the last year, I’m a buyer of real, physical gold near $1200 and holder of it any price above that for now.
Tesla Hits All Time High, Wants To Deliver 35000 Model S In 2014 -I’ve no position, but plan to short Tesla $TSLA some day when the current bubble blow bull market finally pops. Not yet tho! Lots of welfare and taxpayer help for the co & its customers as Tesla beats estimates If Tesla is actually a profitable business model, then why does it and its rich customers need so many subsidies much help from taxpayers? It ain’t. And all businesses built on unsustainable welfare models eventually collapse.
