Dispatches from District 48
Forget the #DIV/0! PE. That prices the company at over 57 times annual revenues.
The stock market usually represents a fine case in point when discussing average population intelligence.
I usually come away feeling like a moron because I cannot come close to predict the mood swings of the masses. 😉
IMHO - and I am not a financial genius - there is *way* too much money in the stock market, driven there by printing and inflation, chasing not nearly enough value. Many big stocks are valued via what's more or less a "popularity contest" (back to high school), and those values are used to calibrate "reasonable" expectations for things like P/E for the rest of the market. Which, in turn, is part of the reason CEO salaries are often ludicrously overvalued by "running the business" standards. There's far more money to be made for shareholders playing the Wall Street Popularity Contest than there is from things like growing revenues and profits, having happy and loyal customers, etc. (and I think that the extremely sharp drop in compensation as you go down the ladder from "Wall Street visible" backs up this assertion).
This is where groups like the "Occupy Movement" get messed up - they see all of this insane money swirling around and the most visible accumulation points are CEO salaries and direct their outrage there. Conservatives and Tea Party types see the market aspects and try to defend the "free" market. Both groups are partially right - there is a market and there is outsized wealth being accumulated, but it's because the market is deeply distorted and twisted by the financial shenanigans of Washington and the Fed. The other side effect is that the rest of us are forced to "invest" in this casino or lose our accumulated wealth to inflation.
It's given me a decent snark for dealing with progressives and "Occupy" types: Fortune 500 CEOs are the 1%... of the problem.
Just how does Twitter make any money, btw?
Feels like 1999 all over again!
Having said that about 1999, somewhat facetiously, I'd add that while Twitter is severely over-valued, as are Amazon and Facebook, the market as a whole is much more sane than it was then, even at today's values. From a price-to-earnings standpoint, we're at about the average for the last 80 years. In 1999, we were around triple the average.
I have a business plan I am going to pitch to some VCers next week: development of new social media platform which utilizes telegraph communication language to “print out” audibly on user smartphones.
Instead of having annoying conversations, or having to type, it will employ Morse code, which can be translated either using audible tones, or by vibration.
This format allows users to communicate rapidly using dots and dashes, enveloping them in the modern technology era, whilst evoking bygone era nostalgia.
Messages will be limited to 100 characters, due to increasing user inattentiveness and decreasing mental capacity.
Should be worth at least $50 billion from the ad revenue potential alone.
Is anyone on the Internet make money? Advertising!
Hipsters would approve.
There are ads inserted into the Twitter stream, but I don't know if that's the extent of it.
Yep, welcome to the new tech bubble.
Faceplant^h^h^h^h^hbook up almost 50% since August? Really? I guess Zuckerberg is the new Ebbers!
Karl Denninger, who writes at http://www.market-ticker.org, has been blasting the Fed for some years for its pumping money into the stock and bond markets. he has some compelling takes on the ongoing bubble.
who are you to question the wisdom of The Market. (: