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THEBIGMAN

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About THEBIGMAN

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  1. Plus ça change, plus c'est la même chose. I expect that five years' worth of freshly minted electronically-created money from out of nowhere will eventually filter down into higher food and fuel prices. I suspect that these things take many years to play out though, and only end in brief and violent economic turmoils. Revolutions started in the middle east with the Arab spring. Now, they're on the periphery of Europe with bloodshed in Ukraine. America, whilst still hugely in debt, at least still controls the world's reserve currency, has massive agricultural capacity and is potentially capable of becoming energy-independent. I think severe inflation is still a big potential problem in Europe; the Euro won't survive that. When people start getting cold and hungry they'll vote in the same thickies who advocate money-printing to mitigate the damage done by, er, money-printing. And to do that will require a break-up of the Euro. Interesting times.
  2. FYI: Ray Dalio's Economic Principles Website : http://www.economicprinciples.org/ Video also available at http://www.youtube.com/watch?v=PHe0bXAIuk0 Download associated book (PDF format) here: http://bwater.com/Uploads/FileManager/research/how-the-economic-machine-works/ray_dalio__how_the_economic_machine_works__leveragings_and_deleveragings.pdf I. HOW THE ECONOMIC MACHINE WORKS A Transactions-Based Approach 1 Productivity Growth 6 Long-Term Debt Cycle 11 Short-Term Debt Cycle 19 II. DEBT CYCLES LEVERAGINGS & DELEVERAGINGS An In-Depth Look at Deleveragings 25 U.S. Deleveraging, 1930s 61 Weimar Republic Deleveraging, 1920s 115 III. PRODUCTIVITY WHY COUNTRIES SUCCEED & FAIL OVER THE LONG TERM The Last 500 Years and the Cycles Behind Template 162 The Formula for Economic Success 178
  3. I think the following link is the last word on FaceBook. Why? Because it was written way back in 2007. Enjoy: http://www.guardian.co.uk/technology/2007/feb/08/business.comment
  4. Just found out about the Automatic Earth website ( http://theautomaticearth.com/ ). Nicole Foss fron this site has some very valuable things to say: Enjoy
  5. Unless it is feasible : http://www.youtube.com/watch?v=OtM6XJlynkk
  6. LOL, Cuban nails it on the success of the IPO: http://blogmaverick.com/2012/09/04/facebook-handled-their-ipo-exactly-right/ I'm still not buying FB at current prices. When the dip below $15 I'll think again. My hunch is that FB might eventually make a bid for RIM / Blackberry in order to acquire expertise in producing a mobile phone optimised for the FaceBook platform. That could be a game-changer...
  7. THEBIGMAN

    Shaft Sinkers

    Blood on the streets at the moment: Down to about 33p and ohhhh my butt is hurtin'. Still, am quite optimistic after perusing the latest interim annual report - http://www.shaftsinkersgroup.com/uploads/interimresultspresentation2012final.pdf Looks to me like a massive market overreaction. Time will tell.
  8. THEBIGMAN

    Shaft Sinkers

    LOL! A stinky shafting would probably turn me bipolar! Not one to bet the farm on, but (I think) an interesting punt, nonetheless.
  9. THEBIGMAN

    Shaft Sinkers

    Full disclosure: I own shares in Shaft Sinkers (LSE: SHFT). Technically this post makes me a ramping bastard, so do your own research and make your own mind up... It has often been said that, in the California gold rush, very few prospectors struck it rich. However, those selling picks and shovels made an absolute fortune. I think Shaft Sinkers is such a stock. They're specialists in digging out these ruddy huge mining shafts hundreds of metres deep for other mining companies to perform their operations. And they have the most amusing company name on any listed stock market. Most of their contracts at present are in South Africa for diamond, gold and platinum mining, where SHFT also seems to specialise. Since continuing QE suggests rising precious metal prices going forward - making PM mining more lucrative, SHFT should have plenty of business. They don't seem to be too involved in sinking shafts for mines that obtain the sort of commodities that would be hit hard by a China slowdown. A spate of unfortunate incidents has absolutely hammered the share price to 41p. At this price they yield over 12%. Being a small company (FTSE SmallCap index, curent market cap £23.3m) there is usually a large-ish bid-offer spread of around 3p. They had a fatality back in June 2012, and South African miners have been striking for better pay and conditions. Earlier today, EuroChem announced they will take legal action against SHFT to claim compensation for a botched Russian potash mining shaft. I think this legal action is unlikely to succeed (EuroChem terminated the contract and have made little further progress due to the same adverse ground conditions). Thus I think the market has over-reacted to the bad news and will recover nicely in time, with that monster yield to enjoy in the mean-time. Whatcha nincompoops think?
  10. Bill Bonner has a typically acerbic view in a new article here: http://www.moneyweek.com/news-and-charts/economics/us/bill-bonner-running-out-of-suckers-60221 Good to see that GEI members were way ahead of the curve on this one, and have largely been proven right so far!
  11. Maybe, though I think it's a very risky investment. Not one to bet the farm on. Really, one is getting into the "guess the bottom" phase and your guess is as good as mine. I can see quite a lot of merit in Peppa Pig's ballpark $6/share, particularly when coupled with Mr. Market's tendency to overshoot fair valuation on both the way up and down. I don't think we're into the "revulsion" phase yet. I think that the price will drift slowly lower and lower with much volatility on the way (given current economic uncertainties, this isn't exactly prophetic). In other words, for every five sellers there will be four buyers who are betting on the price having bottomed out, only for their naive optimistic dreams smashed later on the rocks of reality. It also doesn't take a genius to figure out there will be sudden drops and short-lived relief rallies as original early investor tranches become eligible for trade on the exchanges. I really should point out that I could be talking out of my backside, though. I really thought the Google IPO would tank and a big player like Microsoft would take over the search market share along with search-directed ad revenue. Furthermore I still think my reasoning behind that opinion was quite sound. But I was still wildly wrong, although at least I didn't lose any money as a consequence (disregarding opportunity cost perhaps). Still, as the sage of Omaha has alluded, you really don't have to swing for every ball. However, a $15/share price still values the company around $50billion IIRC, which I personally think is still a nutso valuation. As others have stated, where's the growth going to come from when every man and his dog already have a Facebook account? This is why I think it's only investable with Zuckerberg in charge. Zuckerberg will continue to run the company like a lean-and-mean startup, always on the lookout for creating revenue from the huge dataset that Facebook has already amassed, on the cheap, without compromising the principles of "fair play" that would ultimately damage the business. And there's a lot of scope there, as anyone familiar with the parlour game of "six degrees of separation" should know. This is a company that, with a little creativity and ingenuity, has the ability to, for example, turn the mobile communications industry on its head overnight. Like I say, at around $15/share I'll consider scrutinising the business to determine a good value entry price.
  12. Well... you'd think so, but I doubt it. Ben Graham recommended investors to steer clear of IPOs, as a general guideline, in his book "The Intelligent Investor" for precisely the reasons we've seen illustrated by the Facebook flotation. The odds are stacked against you as there are vested interests vying to float at the highest possible price - a price which can subsequently only go in one direction: Down. Warren Buffett and Charlie Munger have reiterated this, too. Ergo, a phenomenal number of investors have either disregarded the advice of the investors with the world's greatest track record, or have never even bothered to read them after all these years. The results are laughably predictable. What's amusing is that, in this internet age of freely available information, there's this herd-like mass of novice investors who view shares as potential lottery tickets; queueing up at the stockbroker to p!ss their hard-earned dollars up the wall without pausing to consider the motivations of the Jim Cramers of the world. A fool and his money... 'Twas ever thus. What's not so amusing is that a lot of so-called "professional" and institutional investors must have been suckered in, too. Folks, that kind of idiocy is what the absurdly high annual management charge on your pension fund is paying for.
  13. LOL!!! IIRC, Zuckerberg has maintained a controlling stake in the company (something like 51% of the stock). If this is the case then the executive board will remain nice and compliant or risk lose their cushy well-paid non-jobs. I don't think Zuckerberg would tolerate back-stabbers! Nevertheless, I am truly astonished by the short memories and utterly asinine opinion of some so-called "experts". They just never learn, do they? Yeah. Just like Apple did when they ousted Steve Jobs in favour of John Sculley. Nice move from the bozos on the board there! Are these muppets for real? They blame the wildly successful existing company CEO barely a month after IPO because they paid wildly over the odds for the stock on the say-so from some spiv from Goldman Sachs? You just couldn't make it up. If, by some awful freak turn of events, Zuckerberg does get ousted and some bland half-wit bean-counter, or smug dunderhead MBA-wielding ex-Goldman spiv, or some other blue-chip chinless wonder chump who has learnt a few buzzwords like "leveraged buyout", or Donald Trump takes over (let's collectively refer to any one of these ghastly imbeciles as a "stuffed shirt") , two things will happen: The stock price will decline inexorably over time. What on earth would a "stuffed shirt" know about social media, a relatively new concept where no-one has any idea of the viable long-term business models? Software tech business needs smarts, vision and purpose. How's Microsoft been doing since Bill Gates left? ("quite crap" is the answer if you're a long-term shareholder). Parachuting in a dime-a-dozen cookie-cutter stuffed shirt that focuses on the latest quarterly report in order to curry favour (and a corresponding mega-salary that their purported business acumen deserves so much) from institutional shareholders will not facilitate the production of interesting new products or services. Rather, stagnation - the inclination to "play safe" will be irresistible. Most stuffed shirt muppets have never had an original idea in their lives. Indeed, the extent of their self-proclaimed genius rarely tends to amount to anything more than announcing a large share buyback scheme, citing improved stockholder value through an increase in earnings per share. Then the stock price will tank some more and the stuffed shirt will either be fired or resign. Either way they'll be replaced with another stuffed shirt. The replacement won't be any better. Because they don't understand software, the stuffed shirt will look to obsolete, stupid or just plain bad business models when they try to interfere with ways to increase revenue. Expect Facebook to announce the sale of all names and email address data to Nigerian spammers and bank fraudsters. Sell credit card usage and purchase demographics to the Russian mafia, Sell spicy images that are marked "private" to tawdry amateur pornography outfits (read the facebook terms of service, it's their data now, so don't bother suing). Correspondingly expect everyone with half a brain to erase as much personal information from Facebook as possible (actually you're a complete idiot if you haven't already done this, and you're already quite dozy for putting it there in the first place. So there.). Expect people to start deleting their user accounts. This will hurt the intrinsic value of FaceBook, perpetuating a decline in the value of the business. Given the tendency of markets to over-react, I still wouldn't buy FB stock.When they hit $15/share I'll give the numbers another scroot: Assuming Mark Zuckerberg remains as CEO, I think it'll be an interesting company to watch. With the creative and intellectual firepower they have at their disposal, established and extensive infrastructure (some 180,000 servers according to the most recent rumours) and rather deep pockets (thanks in no small part to the gullible hordes that just threw money at them in the IPO), they can ride out tough economic conditions and quite possibly build a hugely profitable business out of multiple mutually supporting revenue streams.
  14. And BOOM! goes the dynamite! I think the problem is that no-one has clearly defined what the problem is. One person's gripe is another person's favourite feature. Perhaps that's why some berks paid north of $40 for FaceBook stock. Perhaps that's why there's a vocal outcry from people who need to get out more every time there is a slight design change made by FaceBook engineers. Perhaps that's why the Google+ social network hasn't seemed to set the world on fire, or why Microsoft is dipping it's toe into the arena ( http://www.so.cl/ )
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