"Last month, Net Applications began removing Chrome prerendered browsing traffic from its statistics, noting that “prerendering in February 2012 accounted for 4.3% of Chrome's daily unique visitors.” In doing so Net Applications became the first company to adjust its data reports for websites"
You are very right in one sense. Consider, though, with how badly Facebook has done in ths regard that it still has $1B/year in earnings. If the business folks don't screw up FB and figure out how to make ads work, by your admission, there is a lot of room to improve:)
Agreed, AC. IPOs are a prime example of assymetrical information. A peon like me has absolutely no chance of knowing the true valuation of something like Facebook. Even large institutions don't. Heck, even the managers of FB don't know it 100%, but that is the group that holds the real info.
I won't participate in an IPO for the reasons you bring up.
The sources I have read attributed some of the strangeness due to trading problems on Nasdaq. Not that what you are saying isn't possible, but I don't know how you can say so with certainty.
False. If this were the case, then investors are accepting higher risk for no higher return. This would be sheer foolishness. In reality, investors are looking for an average return that is higher than a less risky would return on average.
I agree on the IPO but for different reasons. I am a peon and too many people have inside information. I am at a huge disadvantage and have no desire to play a losing game.
I am emotionally invested in what investment? I don't own FB at all. Actually I am invested in index funds in the US, Europe and China. I don't believe in beating the market and I don't believe in keeping my money tied completely up in one economy.
Correct. Risk is uncertainty of income. An investment that could return 100% or 300% per year is very risky. Not quite what most people think when they hear "risk".
It would. But in reality there are non-diversifiable risks that make this impossible. But as you suggest, portfolio theory finds ways to minimize diversifiable risks.
Efficient market theory has one major tennet. Basically that the overall demanded return is directly proportional to the riskiness of an investment. While markets are not 100% efficient, they are pretty efficient and multitudes of studies show this risk/reward expectation holds up in real life.
Risk is safe if you are able to engage in multiple non-correlated risks (your car insurance company does this well) or have a time horizon that allows you to ride out short-term (sometimes short-term can be 20 years or more...) downturns.
Please don't equate financial risk with jumping off of a bridge or even stupid risk like buying into your brother's Ponzi scheme. Financial risk has a precise meaning and it does correlate with long-term reward.
I agree. The bet investors are making is that FB will figure out how to mitigate those issues or find creative new routes to make money. It will be interesting to see if they do.
Which has nothing to do with how well the IPO was handled. You might argue that FB is overvalued and you might be right. However, the issuing bank did its job better than 90% of the other IPOs I've seen.
And that is exactly the point. right now, Facebook has been run by a kid who just wants to build the biggest social network. If Facebook can succeed in learning how to make moeny, they will go from their paltry $1 Billion earnings to a really big number:)
I'm not qualified to do a ranking. But love them or hate them, the Chinese sure have a good long term vision for what they want to accomplish and they sure are getting what they want.
Paying companies to relocation is a win for owners a loss for working stiffs. In the best scenario, tax payers in the new community get the benefit of more jobs at the expense of subsidizing millionaires. The old community losts the jobs the new community gains.
In this case, not only did the new community not gain jobs in the long term, but they are now responsible for $100M in loans. Brilliant job.
I like free markets. I have government in bed with big business.
I am not sure which is more disappointing. The parent post or the people who voted this insightful.
Google and Facebook are hitting the Holy Grail of marketing. They do not advertise to generic demographics. Instead they are able to market to the individual. The more information they can find out about you, the more effective their advertising.Instead of marketers blindy throwing out products to 25-34 year old females, they will be able to disect the market in finer terms and use their money wisely. The more effective the advertising, the more money they can charge. So while you laugh at the idea, Google's founders could lose a billion in their couch cushions.
If you are risk averse, stay away from IPOs? This ain't rocket science... the more risk you are willing to take, the higher return you will get long term. If you are not able or unwilling to stay in for the long term, or a drop in your portfolio will keep you up at night, play it safe. I am a moderately aggressive investor as I have a 30-40 year investment timeline and a Finance background. My mom who works for the government, hates risk and will be retired in five years should have a more passive investment strategy.
Slashdot Mirror
This might be what you are referring to:
"Last month, Net Applications began removing Chrome prerendered browsing traffic from its statistics, noting that “prerendering in February 2012 accounted for 4.3% of Chrome's daily unique visitors.” In doing so Net Applications became the first company to adjust its data reports for websites"
0.77mm per year over 42 years. So the person who modded you up wasted a mod point.
You are very right in one sense. Consider, though, with how badly Facebook has done in ths regard that it still has $1B/year in earnings. If the business folks don't screw up FB and figure out how to make ads work, by your admission, there is a lot of room to improve :)
Agreed, AC. IPOs are a prime example of assymetrical information. A peon like me has absolutely no chance of knowing the true valuation of something like Facebook. Even large institutions don't. Heck, even the managers of FB don't know it 100%, but that is the group that holds the real info.
I won't participate in an IPO for the reasons you bring up.
Investors are very irrational. And you confuse chance of losing money with risk...
The sources I have read attributed some of the strangeness due to trading problems on Nasdaq. Not that what you are saying isn't possible, but I don't know how you can say so with certainty.
Oh no... a technical trader... they should all be shot for the good of humanity.
The source you site indicates that it was Nasdaq that was at fault due to trading execution errors not an overpriced stock.
False. If this were the case, then investors are accepting higher risk for no higher return. This would be sheer foolishness. In reality, investors are looking for an average return that is higher than a less risky would return on average.
I agree on the IPO but for different reasons. I am a peon and too many people have inside information. I am at a huge disadvantage and have no desire to play a losing game.
I am emotionally invested in what investment? I don't own FB at all. Actually I am invested in index funds in the US, Europe and China. I don't believe in beating the market and I don't believe in keeping my money tied completely up in one economy.
Correct. Risk is uncertainty of income. An investment that could return 100% or 300% per year is very risky. Not quite what most people think when they hear "risk".
Thanks for the insight. In some ways, Europe is ahead of us in understanding how free markets should work.
It would. But in reality there are non-diversifiable risks that make this impossible. But as you suggest, portfolio theory finds ways to minimize diversifiable risks.
There is certainly an element of variability to it, but investors would have to be irrational to EVER accept higher risk and lower return.
Curt Schilling is a full-blown teabagger.
Well, the whole Boston thing made that obvious :)
And yea... people are hypocrites, film at 11:00...
Efficient market theory has one major tennet. Basically that the overall demanded return is directly proportional to the riskiness of an investment. While markets are not 100% efficient, they are pretty efficient and multitudes of studies show this risk/reward expectation holds up in real life.
Risk is safe if you are able to engage in multiple non-correlated risks (your car insurance company does this well) or have a time horizon that allows you to ride out short-term (sometimes short-term can be 20 years or more...) downturns.
Please don't equate financial risk with jumping off of a bridge or even stupid risk like buying into your brother's Ponzi scheme. Financial risk has a precise meaning and it does correlate with long-term reward.
I agree. The bet investors are making is that FB will figure out how to mitigate those issues or find creative new routes to make money. It will be interesting to see if they do.
Which has nothing to do with how well the IPO was handled. You might argue that FB is overvalued and you might be right. However, the issuing bank did its job better than 90% of the other IPOs I've seen.
We will have to compare notes in five years :)
And that is exactly the point. right now, Facebook has been run by a kid who just wants to build the biggest social network. If Facebook can succeed in learning how to make moeny, they will go from their paltry $1 Billion earnings to a really big number :)
I'm not qualified to do a ranking. But love them or hate them, the Chinese sure have a good long term vision for what they want to accomplish and they sure are getting what they want.
Paying companies to relocation is a win for owners a loss for working stiffs. In the best scenario, tax payers in the new community get the benefit of more jobs at the expense of subsidizing millionaires. The old community losts the jobs the new community gains.
In this case, not only did the new community not gain jobs in the long term, but they are now responsible for $100M in loans. Brilliant job.
I like free markets. I have government in bed with big business.
I am not sure which is more disappointing. The parent post or the people who voted this insightful.
Google and Facebook are hitting the Holy Grail of marketing. They do not advertise to generic demographics. Instead they are able to market to the individual. The more information they can find out about you, the more effective their advertising.Instead of marketers blindy throwing out products to 25-34 year old females, they will be able to disect the market in finer terms and use their money wisely. The more effective the advertising, the more money they can charge. So while you laugh at the idea, Google's founders could lose a billion in their couch cushions.
If you are risk averse, stay away from IPOs? This ain't rocket science... the more risk you are willing to take, the higher return you will get long term. If you are not able or unwilling to stay in for the long term, or a drop in your portfolio will keep you up at night, play it safe. I am a moderately aggressive investor as I have a 30-40 year investment timeline and a Finance background. My mom who works for the government, hates risk and will be retired in five years should have a more passive investment strategy.