Author Topic: FB - Facebook  (Read 79052 times)

no_free_lunch

  • Hero Member
  • *****
  • Posts: 1047
Re: FB - Facebook
« Reply #380 on: April 20, 2017, 10:16:30 AM »
Gloorysk I don't own FB and won't touch it at these prices.   However, the one thing your methodology might be lacking is that FB can probably change the amount of advertising that is done due to the targeted nature of their advertising platform.  I think that there are many small vendors who would advertise on FB and simply wouldn't advertise via more traditional avenues.  Now some of these would have already converted into the advertising pool via google search ads or some other tech but I don't think iti s done.  Facebook's ability to target specific users based on geography or demographics should continue to grow the net advertising base.

All that being said I will wait for a substantial pullback as I already have enough blue sky thinking going on with my TSLA investment.

Yea agree with you - the point I think you're missing is that FB is no where close to being 10% of the total ad market. So my valuation at $140 leaves plenty of room for them to capture additional customers (like the small vendors you list). So yes, I agree they should continue to grow their advertising base. But I'm being very generous in how much I think that will be able to grow.

I don't think I am missing that.  The reason why I am not invested is they still need to do quite some growing to justify their share price.  All I am saying is that if we use some measure of the current global ad spend as their limit to growth I think it will understate that limit.


Spekulatius

  • Hero Member
  • *****
  • Posts: 596
Re: FB - Facebook
« Reply #381 on: April 20, 2017, 10:20:28 AM »
Biggest risk is that someone develops a better mousetrap out of nowhere. Since such a business is asset  light and mostly supported by network effects, it's hard to do, but once a competing business gains traction, it could grow very quickly, since you can rent out the server capacity as needed.
Network effect are hard to overcome, but again, if the user would allow an alternative software to tap into their  FB user contacts, a user could reestablish his own network very quickly.

I think the question with FB is not how long it is going to grow, but about the longevity of it's dominance. In the past, large business, once they gained scale where dominating based on  a mix of physical presence, brand, technology, scale, distribution etc. Now, a lot of these factors above are not issues any more in this asset light world. Just as FB grew quickly, a competitor can potentially grow just as quickly and dislodge them.

I guess the same could be said for AMZN and GOOG. And that’s why I keep each of them a small position (3.5% AMZN, 3.5% FB, and 5.5% GOOG). Taken as a whole they are a meaningful part of my portfolio, but I guess the risk all three will be dislodged by new competitors is small (at least for the foreseeable future).

Cheers,

Gio

AMZN would be hard to dislodge, imo. First, this is not a virtual company, since they run a substantial distribution infrastructure. Then they are willing to forgo profits seemingly indefinitely? Who would, much less could dislodge them ? There is only Walmart who can match the infrastructure and maybe beat them on price, said if they get sloppy.
To be a realist, one has to believe in miracles.

awindenberger

  • Sr. Member
  • ****
  • Posts: 285
Re: FB - Facebook
« Reply #382 on: April 20, 2017, 07:29:48 PM »
This is my experience: the business I own and manage has always been a local business, but I have often thought that its services could be of great interest for architects and engineers working in other nations as well. To advertise them in those nations though would have been an effort both incredibly costly and time consuming. Therefore, I have never tried to expand my business outside Italy. Now thanks to FB that’s exactly what I am trying to do, and already with some tangible results. Obviously the jury is still out: this experiment could still fail in a miserable way… Anyway, just think about the possibilities that FB has opened up for me, and probably for many other small business owners around the world! I am willing to spend much more than I have ever spent in marketing to test those possibilities.

Cheers,

Gio

Given my day job as an online marketer, I completely agree with Gio, there is no better way to target the people that will be most likely to be interested in your product than Facebook. They still seem priced for perfection right now though.

Very interesting endavour, Gio. I really hope you will keep us all updated on your experience of professional use of FB this way going forward.

giofranchi

  • Hero Member
  • *****
  • Posts: 5482
  • Twitter: @giovfranchi
    • Master School Politecnico di Milano
Re: FB - Facebook
« Reply #383 on: April 21, 2017, 01:05:07 AM »
Very interesting endavour, Gio. I really hope you will keep us all updated on your experience of professional use of FB this way going forward.

Thank you, John!
The following quote from Larry Page summerizes quite well how I feel about this endeavour:
https://twitter.com/giovfranchi/status/855317127594516480
And I will surely keep you updated on how it is going.

Cheers,

Gio
Portfolio: AMZN, BRK.B, DIS, FB, FFH, FWONA, GOOG, IBB, JNJ, JPM, LBRDA, MKL, NKE, PCLN, QQQ, SBUX, SMH, TRV, VHT, XBI

giofranchi

  • Hero Member
  • *****
  • Posts: 5482
  • Twitter: @giovfranchi
    • Master School Politecnico di Milano
Re: FB - Facebook
« Reply #384 on: April 21, 2017, 01:11:28 AM »
AMZN would be hard to dislodge, imo. First, this is not a virtual company, since they run a substantial distribution infrastructure. Then they are willing to forgo profits seemingly indefinitely? Who would, much less could dislodge them ? There is only Walmart who can match the infrastructure and maybe beat them on price, said if they get sloppy.

All very true.
On the other hand AMZN already has a formidable competitor on a global scale: Alibaba of course. And I guess it could be said the same reasons that make AMZN difficult to dislodge in the west also make BABA difficult to dislodge in the east.
Instead, at least for now, there is nothing that even gets close to FB's 1,892 million active users, which keep increasing at the pace of 10 per second!

Cheers,

Gio
« Last Edit: April 21, 2017, 01:44:27 AM by giofranchi »
Portfolio: AMZN, BRK.B, DIS, FB, FFH, FWONA, GOOG, IBB, JNJ, JPM, LBRDA, MKL, NKE, PCLN, QQQ, SBUX, SMH, TRV, VHT, XBI

giofranchi

  • Hero Member
  • *****
  • Posts: 5482
  • Twitter: @giovfranchi
    • Master School Politecnico di Milano
Re: FB - Facebook
« Reply #385 on: April 21, 2017, 01:43:43 AM »
Given my day job as an online marketer, I completely agree with Gio, there is no better way to target the people that will be most likely to be interested in your product than Facebook. They still seem priced for perfection right now though.

As I have said, it is extremely difficult imo to get right how fast and how long FB could keep growing. Who really knows? Maybe, also FB will develope other businesses besides its core advertising business, like GOOG and AMZN are doing... Who says FB will remain only an advertising company? It surely has the wherewithal to expand in other areas as well.
If you cannot predict how fast and how long FB could keep growing, its FV must remain very uncertain.
Maybe you are right, and the market is too optimistic right now... or maybe the market is ignoring future opportunities... given this uncertainty, FB remains a small position for me.

Cheers,

Gio
« Last Edit: April 21, 2017, 01:46:46 AM by giofranchi »
Portfolio: AMZN, BRK.B, DIS, FB, FFH, FWONA, GOOG, IBB, JNJ, JPM, LBRDA, MKL, NKE, PCLN, QQQ, SBUX, SMH, TRV, VHT, XBI

ScottHall

  • Hero Member
  • *****
  • Posts: 720
Re: FB - Facebook
« Reply #386 on: April 21, 2017, 02:27:32 AM »
Welcome to the right side of history, Gio.
You can follow me on Twitter @ScottMONEYHall

My new PROPRIETARY RESEARCH on NATIONAL BEVERAGE IS NOW AVAILABLE HERE: https://www.youtube.com/watch?v=XVQW5GyaVbI

giofranchi

  • Hero Member
  • *****
  • Posts: 5482
  • Twitter: @giovfranchi
    • Master School Politecnico di Milano
Re: FB - Facebook
« Reply #387 on: April 21, 2017, 02:39:04 AM »
Welcome to the right side of history, Gio.

As you have told me: "Good if I am right, and I can afford it if I am wrong".

Cheers,

Gio
Portfolio: AMZN, BRK.B, DIS, FB, FFH, FWONA, GOOG, IBB, JNJ, JPM, LBRDA, MKL, NKE, PCLN, QQQ, SBUX, SMH, TRV, VHT, XBI

Liberty

  • Lifetime Member
  • Hero Member
  • *****
  • Posts: 8397
  • twitter.com/libertyRPF
    • twitter.com/libertyRPF
Re: FB - Facebook
« Reply #388 on: April 21, 2017, 05:58:14 AM »
Ajc, you're still acting petulant because I disagreed with you the other day? Grow up. You must be quite a miserable person to be driven to flailing anger by mild push-back online.

I'm sure it's by having no judgement, no independent thinking, and no balls that I retired at 34 starting from zero while never having what most here would consider a high-paying job...

Anyway, I hope things turn around for you and you can someday let go of all this pointless anger. It's not good for you and those around you.

Cheers!
"Most haystacks don't even have a needle." |  I'm on Twitter  | The Twelve Virtues of Rationality

Liberty

  • Lifetime Member
  • Hero Member
  • *****
  • Posts: 8397
  • twitter.com/libertyRPF
    • twitter.com/libertyRPF
Re: FB - Facebook
« Reply #389 on: April 21, 2017, 07:34:01 AM »
Further discussion of Facebook on the latest episode of Exponent:

http://exponent.fm/episode-111-lamentation-not-condemnation/
"Most haystacks don't even have a needle." |  I'm on Twitter  | The Twelve Virtues of Rationality