Release equity and buy facebook shares

I think it has already be pointed out why this idea has its downfall.
If you are so set in your belief, there isn't much anyone can do about it.
But if you were so sure about your belief, then why talk about it on a public forum ? I would just go ahead and jump in.

So I am not sure what you are trying to achieve here? Perhaps you are looking for others to reinforce your view that FB is about to shoot up?
Else, if you are looking into share investing, again I point you to the several excellent share investing threads we have on the forum: this approach is however not focused on:

- Stock picking
- Timing the market

unlike what you are putting forward with your FB idea.
Which is why your idea might not be to the like of the majority here.
 
Maybe falcon can explain why he thinks its such a 'rediculous' idea.

My IP is not in sydney and thus not in a high growth area. I believe that I can make substantial gains on this stock. I have no intention of buying into an overheated syd property market whose bubble is about to burst

Happily. 2 weeks ago you were enquiring about the mechanics of using home equity to buy domestic stocks. Now, in the time since you have discarded that concept and decided on an International portfolio, the most concentrated of concentrated, of precisely one stock. You have settled on Facebook, with the opinion that it will double in 1-2 years. Now this is one of the most closely followed stocks in the world, where the market is at its most efficient. Either you have real insight, the kind that is not widely available so cannot be arbitraged away, or you are punting. Your timeframe, miscellaneous analyst quotes and return expectation tells me the latter.

I wont dissuade you any further though. Keep us posted as to how you go, but just know its a punt.
 
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Right now a lot of people have bought and sold call options for next January in the $90 to $100 range, so a lot of people seem to think that's a good bet in the next six months. There's a lot of optimism out there on the stock.

I believe that FB could be one of those stocks that people in the future wished that they owned...

Don't bother with buying the stock. Leverage up and go all in with call options. You'll make an absolute motza...
 
Don't bother with buying the stock. Leverage up and go all in with call options. You'll make an absolute motza...

Don't bother with this ^^^ and go one step further. Extract the equity, then also get a margin loan on the newly extracted equity - that will really gear you up a STORM. You will be sitting on a beach in no time!


pinkboy
 
Don't bother with this ^^^ and go one step further. Extract the equity, then also get a margin loan on the newly extracted equity - that will really gear you up a STORM. You will be sitting on a beach in no time!


pinkboy

oh god what are you guys doing

next you'll be recommending that he does this blindfolded
 
Hi guys, please advise on reasons not to buy?

Facebook is so ubiquitous and targets people based on the information it has. I have been surprised by how successful Facebook campaigns from some of my friends business' have been. I also see potential in this company, but more so over a 4-8 or more year period rather than a 2 year one.

I am very interested in opinions, but I feel they are a company that is in the right place at the right time with the right framework, infrastructure and user base.
 
Hi guys, please advise on reasons not to buy?

Facebook is so ubiquitous and targets people based on the information it has. I have been surprised by how successful Facebook campaigns from some of my friends business' have been. I also see potential in this company, but more so over a 4-8 or more year period rather than a 2 year one.

I am very interested in opinions, but I feel they are a company that is in the right place at the right time with the right framework, infrastructure and user base.

Nothing against FB; its done great over 3 yrs or so since its float on the nasdaq.
The issue I have is that there are better [ higher % growth] plays out there instead of FB. Id say it got another 10% upside potential in the next 1 yr timeframe, and there are better plays out there than that.
The other thing that concerns me about FB is that its somewhat discretionary and is susceptible to bear markets in force; especially in advertising revenue.

It may be worth it if held for 8 yrs or so, but then again, a lot of other investments would have done the same or more % growth over 8 years, with potentially less risk.
 
Food for thought: I'm a high school teacher, the kids don't use FB they use other social media. Sure they have a profile, but it's to communicate with Nan not each other.

You mentioned China, another thing to consider: in China they use Beibo (or something). WHat happens if they they fail to capture the Chinese market? What would indicate to you that they would be able to compete with the established player in China? If they were able to destroy the established player in China wouldn't that further highlight the risks with stocks such as FB given there are no barriers to entry?


Beelzebub
 
I would buy Apple or Google shares before Facebook but they're ridiculously expensive now so probably not that worthwhile
 
Food for thought: I'm a high school teacher, the kids don't use FB they use other social media. Sure they have a profile, but it's to communicate with Nan not each other.

You mentioned China, another thing to consider: in China they use Beibo (or something). WHat happens if they they fail to capture the Chinese market? What would indicate to you that they would be able to compete with the established player in China? If they were able to destroy the established player in China wouldn't that further highlight the risks with stocks such as FB given there are no barriers to entry?


Beelzebub

++100

The problem you have is there is always something new around the corner. Yes Facebook is popular now, but just around the corner is the next best thing. Something that will sink Facebook.
 
++100

The problem you have is there is always something new around the corner. Yes Facebook is popular now, but just around the corner is the next best thing. Something that will sink Facebook.

Food for thought: I'm a high school teacher, the kids don't use FB they use other social media. Sure they have a profile, but it's to communicate with Nan not each other.

You mentioned China, another thing to consider: in China they use Beibo (or something). WHat happens if they they fail to capture the Chinese market? What would indicate to you that they would be able to compete with the established player in China? If they were able to destroy the established player in China wouldn't that further highlight the risks with stocks such as FB given there are no barriers to entry?


Beelzebub

Thanks for the replies guys. Facebook does a good job of holding on to everyone, and has also bought competition before as well (like Instagram). It might not reach out to high schoolers, but a lot of these high schoolers gradually become more invested in Facebook as they age. I see it with kids in their late teens and early 20's.

Everyone was saying there are alternatives to Google in the early 2000's but they still came out on top. At the end of the day its about how much value is provided and whether that company has the room and the direction to grow. I will be committing more time to research facebook now, maybe there are better investments, or maybe it is one of the better ones. Time will tell.
 
Hi guys, please advise on reasons not to buy?

Facebook is so ubiquitous and targets people based on the information it has. I have been surprised by how successful Facebook campaigns from some of my friends business' have been. I also see potential in this company, but more so over a 4-8 or more year period rather than a 2 year one.

I am very interested in opinions, but I feel they are a company that is in the right place at the right time with the right framework, infrastructure and user base.

I have no opinion on FB stock. Replace FB with any other ticker and my comments would be same as relates to this thread :)
 
Thanks for the replies guys. Facebook does a good job of holding on to everyone, and has also bought competition before as well (like Instagram). It might not reach out to high schoolers, but a lot of these high schoolers gradually become more invested in Facebook as they age. I see it with kids in their late teens and early 20's.

Everyone was saying there are alternatives to Google in the early 2000's but they still came out on top. At the end of the day its about how much value is provided and whether that company has the room and the direction to grow. I will be committing more time to research facebook now, maybe there are better investments, or maybe it is one of the better ones. Time will tell.

Okay, fair enough. Some of these are good points. But what I and I think everyone else is getting at is that while your research means it might stack up, are you willing to bet a substantial portion of your wealth on the stock?

Also, don't forget to factor in opportunity cost to your risk v reward calculations. If you put the cash into property what would your expected profit be? If you put the same amount into FB what would your expected profit be? What's the difference between the two amounts? Does the incredibly high risk of the FB stock justify the difference in return? And don't forget the low AU, if it goes back to parity you lose a pretty big chunk of your profit at cash out time.

Sure, invest a couple grand if you want but seriously don't bet the house, don't put in more than you are willing to lose.

I'm no expert, but that's my two cents worth anyway.

Beelzebub
 
Okay, fair enough. Some of these are good points. But what I and I think everyone else is getting at is that while your research means it might stack up, are you willing to bet a substantial portion of your wealth on the stock?

Also, don't forget to factor in opportunity cost to your risk v reward calculations. If you put the cash into property what would your expected profit be? If you put the same amount into FB what would your expected profit be? What's the difference between the two amounts? Does the incredibly high risk of the FB stock justify the difference in return? And don't forget the low AU, if it goes back to parity you lose a pretty big chunk of your profit at cash out time.

Sure, invest a couple grand if you want but seriously don't bet the house, don't put in more than you are willing to lose.

I'm no expert, but that's my two cents worth anyway.

Beelzebub

I did not even take into mind the exchange rate fluctuations! That just adds a new dimension of risk.. You make very good points
 
Someone in China or India would be working on that right now their middle class market is huge,or they could go the other way and become unlinked..

http://en.wikipedia.org/wiki/Luddite

There are already popular Chinese social media sites such as Qzone & Sina Weibo (not sure about India, but presume they have large ones too), but for China at least it would be complicated for them to break into the western market due to their laws (e.g. traffic blocking, hosting & content laws). Maybe there will be a crossover one day (a popular platform in east and west), but I would guess some time off...
 
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