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Mark Cuban Blames Himself For Losing Money On Facebook IPO
McGruber writes "In a blog entry, American business magnate Mark Cuban explained who he blames for his losing money in Facebook stock: 'I bought and sold FB shares as a TRADE, not an investment. I lost money. When the stock didn't bounce as I thought/hoped it would, I realized I was wrong and got out. It wasn't the fault of the FB CFO that I lost money. It was my fault. I know that no one sells me shares of stock because they expect the price of the stock to go up. So someone saw me coming and they sold me the stock. That is the way the stock market works. When you sit at the trading terminal you look for the sucker. When you don't see one, it's you. In this case it was me.'"
And Amazon has had a PE of over 100 for a long time and has more than doubled in the past 2 years. Its current PE is 315! My point is that making a trading decision is not as simple as looking at the PE.
Amazon is different. Amazon is essentially making a land grab and has huge revenues. If you are in Amazon's position, you build revenues first, then later focus on profitability. It also helps that this strategy also demolishes your competitors.
Facebook on the other hand, is not seeing revenue growth anywhere near what it needs to be to justify its valuation. It is finding it harder to monetize its user base. Amazon is already the world's largest online retailer, with revenues growing faster than Facebook's by some accounts.
P/E is not everything, but an investor can make a reasonable bet that Amazon's P/E will come down without the share price going down.