Friday’s Facebook Flop Status Quo? Down Down Deeper And Down

“Fight Against Stupidity And Bureaucracy”

Way back towards the end of May I wrote a post with a big ‘F’-ing title about the greed-inspired stupidity and madness that preceded the Facebook IPO. Remember, “Furious Flabbergasted Facebook Fools Face Frightening Falls From Fanciful Flagging Financial Flotation Farce”? 

Launched at the ridiculous price of $38 a share, or about 100 times the company's earnings, the price momentarily made it to $45, but then quickly plummeted to $34. 

In my post in May I suggested that the shares were worth more like $18 a share rather than $38. As of yesterday (August 16th) the price had fallen below $20.

I'm not saying this by way of blowing my trumpet, because I now think that my $18 peg may have been rather optimistic too. Investors have by and large turned against Facebook.

Apart from the odd blip, the stock has been on a downward trend pressured by disappointing earnings and by the fact that from today the so-called "lockups" that have prevented some early Facebook backers from unloading their stakes begin to expire. This simply means they will be able to sell shares into the market and with around two billion shares eligible for a sell off between now and May 2013, with a big one coming in November, the signs for a price recovery are ominous.

In fact further falls are more than likely.

Those who can are shorting the stock like crazy. (Shorting is where your broker borrows shares which you sell immediately in the hope that you can buy them back later at a lower price.)

The number of Facebook shares on loan to short sellers has risen from 63 million a month ago to more than 93 million.

So is it a good buy now at $18? I think not. Not for a while anyhow, until these locked shares find their way into the market and the price stabilizes and that will probably be well into 2013.

In the short term the status quo is probably down down deeper and down.

Forget Facebook and enjoy some music from the 70s instead.

http://www.youtube.com/watch?v=IKe2OfXLxuc

The small print.

Fasab disclaimer: this blog post does not constitute professional advice as regards investments on the stock exchange, such advice would only be given and indicated thus if an outrageous fee were being charged and this blog is being given to you for free. Also any investor should always be aware that shares can fall as well as plummet and should act accordingly by not investing any money they can not afford to lose.

Furious Flabbergasted Facebook Fools Face Frightening Falls From Fanciful Flagging Financial Floatation Farce

“Fight Against Stupidity And Bureaucracy”

First of all, well done if you were one of the people who tried out the quiz. I hope you enjoyed it.

Today’s blog, if the alliterated title full of “f” words hasn’t given it away already, is regarding financial matters. No, hang on, stick with it. It’s not that bad really.

Were you one of the “zuckers” who bought shares in Facebook? I hope the answer is no, because it is another example of the stupidity and madness that greed can provoke in people who should know better, but frequently don’t.

I can’t predict the future, but I knew that the Facebook IPO would cost a lot of idiots a lot of money.

The IPO launch price was tagged at $38 per share or something like 100 times the company’s earnings. It is easy to know why they priced it so. They set the price that high because they thought they could get away with it. Because the herd, unknowing and unthinking, would swallow the crazy hype about the company and buy, buy, buy!

Does that show more than a little contempt for the people you want to invest in your company?  Sadly I think that it does. Not that it is all down to the greed of Zuckerberg. The advising and underwriting banks had a lot to do with it and we know for a fact that they have nothing but contempt for ordinary mortals like ourselves. We are the marks, they are the conmen!

Usually they take the time to milk us dry before abandoning the market and leaving the ordinary investor to lick their wounds. But this time it happened fast. Within hours in fact!

Those who were not in the “loop” and couldn’t buy pre-launch, waded in on launch day and bought, bought, bought from $38 right up to $45 which the shares reached for a couple of minutes.

The poor fools got whacked almost straight away.

The market very quickly began to realize it had been conned, that this was not a LinkedIn IPO and the issue price had been set far, far too high to ever double on launch. An element of sanity crept in. Facebook  promptly started to fall, by about 11%.

In other words if you’d invested $1000 in the morning you would have turned it into $868 in the space of a few hours. If you were unfortunate to buy at the peak price, your $1000 would now be worth just a little over $700. OUCH!

But it wasn’t just individual investors that got caught. Almost every large mutual fund etc., most of whom are run by, let’s be kind and say, poorer quality managers, felt compelled to purchase Facebook shares, not because they though they were a good buy but because they saw other idiots doing the same and they were frightened about the possibility of missing out “the next Big Thing”.

Little do most investors realize, but the situation could have been even worse had the price not been artificially propped up for a while by the investment bank underwriters.

For the benefit of those who aren’t investors and/or who don’t know how the market works in things like this, here is a quick summary. IPOs are unwritten by investment banks like Morgan Stanley. The investment banks therefore have their reputations on the line. If the IPO goes really bad so does their reputation and their chances of being asked to underwrite future IPOs (and they get huge gigantic enormous fees for this work so they don’t want to lose it.)

Thus, in the case of Facebook, when the share price stopped climbing and quickly fell back to the $38 launch price, the investment bank underwriters stepped in and bought heavily. Without their intervention Facebook could have fallen catastrophically on its first day of trading.

Facebook does generate cash, mainly from advertising revenue. It has a vast following and that advertising revenue should rise substantially over time, so the company may one day be worth the $38 and even more. Google launched at $85 and is now worth $600, but it is a proven quantity revenue-wise and the price rise took time.

But, and it’s a big BUT, Facebook would need to be a hell of a lot better managed than at its market launch.   

But for now, I’m with my other “mad” friend Jim Cramer of Mad Money fame who rightly and sensibly advised a pass on the Facebook IPO. There may be a time to buy into Facebook, but the writing on my wall says “not today thanks”. Booyah Jim!

There’s an obvious question that I haven’t addressed. It is, “So what do I think Facebook is worth?” Well for what my opinion on these matters is worth (i.e. probably not much) I would peg the value at a lot closer to $18 than $38. I may be right, or I may be wrong, but I really don’t care because I haven’t bought any. I might reconsider if it the price comes a bit closer to my valuation, but it’s only a might.

The small print.
Fasab disclaimer: this blog post does not constitute professional advice as regards investments on the stock exchange, such advice would only be given and indicated thus if an outrageous fee were being charged and this blog is being given to you for free. Also any investor should always be aware that shares can fall as well as plummet and should act accordingly by not investing any money they can not afford to lose.

It Always Surprises Me How One Thing Leads To Another!

“Fight Against Stupidity And Bureaucracy”

I have no idea why that should be, I mean why it always surprises me how one thing leads to another. After all where else can one thing go? It’s the logical sequence, it has to happen that way. I think what I really mean is, the surprise is what you are led to. It is hardly ever the thing you were expecting.

Every one of us knows from hours of experience how difficult it is to switch on the computer or log on to the internet on a smart phone or other device and be self-disciplined enough to just search for the thing we initially wanted to look for. Countless times in my experience I have gone on to the internet with the sole purpose of maybe checking some stats or looking up some information relating to a business problem, or a health issue perhaps, only to find an hour or so later that I’m on a completely different tack, forgotten completely about why I started, and now absorbed in some other information that has nothing to do with the job at hand.

Entertaining it certainly is. Enjoyable too, without a doubt. Informative, yes it can be (although you shouldn’t believe everything you read on the internet – unless it appears in this blog of course). And a waste of time? That one is debatable. I think not. Nothing is a waste of time if it is providing any or all of the above attributes – entertainment, enjoyment or information.

One of my favorite sayings is, “It’s a sad day you don’t learn something,” and I am glad to report that in that regard I do not have any sad days. Every day I learn something, usually not what I expected and sometimes the lessons can be very harsh, but it all counts towards bettering oneself and providing valuable experience for the future.

So when I looked at my blog today I had a very different subject in my head to write about. Then I read a comment from my blog-friend coastalcrone on yesterdays blog post “Today Is A Beautiful Day”, part of which sparked off what you are now reading.

Coastalcrone said, “For me words are so visual… they have to look right for me too.”

Now one can analyze any writing from a grammatical viewpoint, or the construction of sentences and paragraphs, or the balance and rhythm of the words, or on its aesthetic content, or on many other different levels. That’s what they do when they study literature at universities, tearing apart and analyzing writing and writers. Sometimes I think that is valuable and informative; at other times I think that they don’t have a clue what they are talking about and have read far, far more into a piece than the writer originally intended. (Most writers, though, are happy to go along with such academic pronouncements because it makes them appear a bit more clever that they would be if they denied them.)

However, all that academic stuff aside, the part of coastalcrone’s comment that promoted all this was really the first part, “… words are so visual”.

Words are visual. Indeed they are. A good description of a person, or a scene, or an incident, conjures up the image in the reader’s mind, and so it should. The better the writing and the writer, the better the visuals the reader experiences.

But, and it’s a big bold BUT, the visual experience is not the writer’s, it always belongs to the reader. The writer is simply the catalyst.

No matter how precise and detailed a description is, if it is a description of something we have not personally witnessed (in other words someone describing a fictitious person or place, or even for example a valley or lake in Australia or India which most of us will never have seen, as opposed to a $10 bill or a laptop computer) a different image will be conjured up in the minds of each individual.

I’m sure you have read a book and then later gone to see the movie. Very seldom if ever does your own visual image agree with the film maker’s. At the moment I can only think of one occasion when my own visual interpretation of a book almost exactly matched the movie interpretation. That was Alastair MacLean’s “Where Eagles Dare”, an excellent World War II espionage thriller and an equally excellent movie. That was probably because MacLean wrote the book and movie screenplay more or less at the same time. (Btw, I don’t mean that I had Richard Burton and Clint Eastwood in my visual picture – that would have been too crazy, even for me!)  

Of course the converse is easier to come to grips with. If you see the movie and then read the book, the movie-maker’s visuals, rather than your own, are already in your head. Sometimes that’s okay, if the movie has been a reasonably close interpretation of the book. If they don’t gel well then the one can easily spoil the enjoyment of the other.

And visual interpretations also hold for the spoken as well as the written word. If one hears something described on the radio, for example, it can produce visual images in one’s mind. Not only that, however, but one often gets an imaginary picture of what the person speaking looks like. It can sometimes come as a bit of shock when you see the person on tv or in real life. I’ve heard people remarking on more than one occasion that so-and-so “isn’t like his voice”.

Even when you meet people, you can also have preconceived ideas about them in the few seconds between seeing them and hearing them speak. Some say that that is conclusive proof that light travels faster than sound, i.e. that most people seem bright until you hear them speak.

Of course one should be mature enough to accept people as they are. What one should definitely not do is laugh at some unfortunate with a voice that doesn’t fit them. Admittedly it can be funny, as this talk show host found out when carrying out a tv interview some years ago.

Let’s have a little experiment and see how good you are. You know you shouldn’t laugh but I rather think you might. I did! Quite a lot L But at the host, naturally! :) 

Enjoy!  

A Long Love Affair

“Flight Against Stupidity And Bureaucracy”

Yesterday’s post was really about a couple of funny helpline incidents. But by way of introducing it I started to talk about my love affair and history with computers. Well I didn’t stop thinking about that when I finished yesterday's blog post and so another post was born.

I hope you find this at least a little bit interesting. Obviously I do because I lived through it. To younger readers I’m sure it won’t mean much, but maybe they can have a laugh at the archaic crap that at the time we all thought was just the greatest thing ever – and actually at the time so it was.

As I said yesterday, my first experiences with computers were on the big mainframes. We had them in university and quite honestly the stuff we were doing on them in those days you could probably do on a good scientific calculator now. But there we were punching cards and working out mathematical formulae and getting results that I’m sure no one understood or cared about but us. (I probably wouldn’t even understand them now either!)

Here are a couple of pictures of the big machines. Younger readers will note the handy compact hard disks used to store information!

Compare the size with one of today's disks

My first tussle with the big boys was on something resembling this

And we inputted our data via either these punch cards

Or via these teletype machines that I called the “chuggers” in yesterday’s post (notice the paper tape at the left hand side that made everything work!)

Then the personal computer era began.

My first introduction to that was a Commodore PET. It was around 1977 or 1978, I think. A fellow student and friend of mine at the time, a Malaysian Chinese guy who’s family were super rich (I don’t think he ever told them the proper exchange rate so his monthly allowance was huge!) bought one of the first of these machines and he loaned it to me for a few days when he away on vacation. I was enthralled. Dear knows why. If you look at the video at the end of this post you’ll see just how basic the technology was.

But ignorance is bliss. There was nothing better around.

Needless to say I could not afford a Commodore PET, nor for that matter an Apple II which was making its debut at more or less the same time and was vastly overpriced as Apple stuff still is. In it's defense the Apple II was a cut above the norm even in those days as regards looks and it had a floppy drive (which I think you had to buy as an optional extra) instead of the awful cassette tapes.

But something that I could afford was the budget priced, but very, very basic Sinclair ZX81. To call it a computer nowadays is a bit of a joke, it had little or no memory, you needed a cassette tape deck, and a television to help it along, and it hadn't even a real keyboard. But it did come in kit form and was fun to build and do basic Basic programming on.

Of course my thirst for bigger and better machines was only getting started. Next I was on to something called a Dragon 32, which as the name implied had a massive 32k of memory  -  yes, you young 'uns, I said 32k, as in kilo  -  of memory. There was talk at the time that the company were working on a 64k version, but hardly anyone at the time believed that a machine with such a vast memory was possible or even desirable!

The Dragon 32 was another one fired up by a cassette tape and a tv screen connection, but it was okay for learing more programming skills and there were plenty of games available that amused everyone at the time.

Then for me came an epiphany, computer-wise. I was about to put my trusty, and maybe a little rusty, typewriter aside. I bought an Amstrad 8256 word processor. It allegedly could handle other tasks as well, but it was primarily a word-processing machine and it did that job pretty well and reliably using its inbuilt Logoscript software. You could store letters and documents on its floppy disks and it had its own printer as part of the bundle. All in all a good piece of kit for the time.

A while after that the whole game changed. And the game changer was the graphical user interface, GUI, and the mouse.

DOS was dead. We would no longer have to plough our way through screens like this

The Xerox 8010 Star Information System in 1981 was the first to use it.

But Xerox didn't see the potential and didn't capitalize on it.  Steve Jobs and Apple did and the Mackintosh released in about 1984 was the first to perfect its use commercially. It was a major change and brought computing into the reach of ordinary people instead of just the computer nerds and geeks.

Microsoft Windows soon dominated the PC end of the market with their 3.1 version doing a reasonably good job. Later versions like Windows 95, 98 and the appalling ME versions were rushed out and unstable. And, having learned nothing they followed that with a similarly unprepared Vista. All that did nothing for the reputation of the company. 

They have made a lot of ground up with Windows 7 and 8 which seem to be a lot better both with regard to stability and functionality. And nowadays if you really hate windows you can run PC machines in linux based operating systems, just look for the penguin.

From the mid 1980s the PC market exploded. Many companies large and small, from the IBMs to brand new budget manufacturers (or rather, assemblers) were born. They all did basically the same job, used the same internal hardware and software and had internal hard drives that would store up to 100MB (yes, mega bites) and up to 4MB of RAM.

At first they looked like this

And then this

And then this

I had versions like pictures two and three. In fact I still have one of what I've called the modern generic desktop design in my office today.  Of course the processing speeds and memory capacities of both the hard drives and the RAM have increased dramatically. Now it is not unusual to be able to buy a desktop computer with at least a terrabyte of hard drive storage and 8 GB (yes, giga bytes) of RAM, as well as extremely fast multi processors and large high definition flat screens.

All in all a great improvement. A lot of it not really necessary for the average user who just uses their computer for a bi of word processing and to surf the internet, but when it comes to computers most of us kinda have to have the best spec we can afford, rather than what we actually need.

And there was another revolution in computers. This one really took off during the late 1990s and it was the increasing popularity of the laptop. In earlier years the laptop had been the preserve of the business community and were priced accordingly,  usually well out of the reach of the average consumer. As well as that the spec was well below that of contemporary desktop machines and no one like to pay more for less.

Then a few things sort of coincided. We had the near saturation of the desktop market with a subsequent slowing down of new sales. The cost of component parts like processors and memory consequently dropped as demand tailed off. And some of the smarter manufacturers saw this as an opportunity to create a brand new market that would allow them to sell affordable laptops with a near desktop spec to the same market that had previously only been interested, and could only afford the bigger desktop computers.

I seldom if ever use my desktop at all now. All my work is done on my laptop. When I travel it comes with me. I'm writing this blog post on one like this right now

As for the future? Who knows? Now that Steve Jobs is no longer with us will someone else invent things that no one wants, and that no one needs, and sell it to them at inflated prices, while generating their love and gratitude for it? Maybe, but I doubt it. I think that Jobs was unique in that respect. He was in the right place at the right time and the right man to take advantage.

What I can envisage is the continued development of faster and better processing; better internet communication speeds with more mobility; infinite storage capacity in the "cloud"; greater integration of all the bits and bobs we have at our disposal; and easier operation of it all through more voice activated control.

The future I think will be every bit as interesting as the past. If some ballax with an EMP device doesn't fry all our chips, that is!

I kept my old typewriter just in case.

Finally, some hysterical historical videos.

Enjoy!

Commodore PET circa 1977

Apple II circa 1977

Sinclair ZX81

Amstrad ad circa 1985

You’re Too Stupid To Own A Computer

“Fight Against Stupidity And Bureaucracy”

"If the automobile had followed the same development as the computer,
a Rolls-Royce would today cost $100,
get a million miles per gallon,
and explode once a year killing everyone inside."

Robert Cringel

I have been involved with computers for many years. I remember using mainframe machines with data inputted on punch cards and bits of flimsy tape, and the machines, which in those days had no monitors, they were just glorified teletype printers, chugging (and I mean chugging) out the results that would have meant absolutely nothing to the uninitiated.

In the grand scheme of things all that wasn’t really so long ago, and at the time it was cutting edge technology and terribly exciting, although now it seems so archaic.

In those days you didn’t quite have to be a nerd or a geek (but it helped) although you did have to have a certain level of education and understanding of mathematics and computer science to be able to make the machines do what you wanted them to do. Or try to, they were a bit temperamental. 

These machines were also horribly expensive and were to be found only in universities and larger companies, thus, whilst people did get themselves into tangles now and again, there was usually someone on hand to help out.

Then along came the personal computer revolution, which we are now well and truly in the midst of, and which has changed the world forever.

Thousands of new companies were spawned out of this revolution, hardware manufacturers, software manufacturers, various support and service industries. People were churning out all sorts of stuff, a lot of it rubbish, some of it good, but all of it difficult for the beginner to use. Before the advent of GUI personal computers were not user friendly at all. Therefore at some stage in the proceedings those who bought them would get stuck or something would go wrong.

Thus were born the infamous computer “help lines”.

I have highlighted these before in a couple of earlier blog posts “Computer Company Help Lines”  and “Cancel The Account”.

Here are a couple more non video examples that I hope you will also enjoy.

Right Click

Tech Support: "I need you to right-click on the Open Desktop."

Customer: "Ok."

Tech Support: "Did you get a pop-up menu?"

Customer: "No."

Tech Support: "Ok. Right click again. Do you see a pop-up menu?"

Customer: "No."

Tech Support: "Ok, sir. Can you tell me what you have done up until this point?"

Customer: "Sure, you told me to write 'click' and I wrote 'click'."

(At this point I had to put the caller on hold to tell the rest of the tech support staff what had happened. I couldn't, however, stop from giggling when I got back to the call.)

Tech Support: "Ok, did you type 'click' with the keyboard?"

Customer: "I have done something dumb, right?"

----

Blank Screen

Allegedly this is the transcript of a recorded conversation between a caller and a computer helpline. It’s a few years old now, but still amusing.

Tech Support:   May I help you?

Customer:   Yes, I'm having trouble with WordPerfect.

Tech Support:   What sort of trouble?

Customer:   Well, I was just typing along, and all of a sudden the words went away.

Tech Support:   Went away?

Customer:   They disappeared.

Tech Support:   Hmmm. So what does your screen look like now?

Customer:    Nothing.

Tech Support:   Nothing?

Customer:   It's blank. It won't accept anything when I type.

Tech Support:   Are you still in WordPerfect, or did you get out?

Customer:   How do I tell?

Tech Support:   Can you see the C prompt on the screen?

Customer:   What's a sea prompt?

Tech Support:   Never mind. Can you move the cursor around on the screen?

Customer:   There isn't any cursor. I told you, it won't accept anything I type.

Tech Support:   Does your monitor have a power indicator?

Customer:   What's a monitor?

Tech Support:   It's the thing with the screen on it that looks like a TV. Does it have a little light that tells you when it's on?

Customer:   I don't know.

Tech Support:   Well, look round the back of the monitor and find where the power cord goes into it. Can you see that?

Customer:   ...yes, I think so.

Tech Support:   Great! Follow the cord to the plug, and tell me if it's plugged into the wall.

Customer:   ...yes, it is.

Tech Support:   When you were behind the monitor, did you notice that there were two cables plugged into the back, not just one?

Customer:    No.

Tech Support:   Well, there are. I need you to look back there again and find the other cable.

Customer:   ...OK, here it is.

Tech Support:   Follow it for me, and tell me if it's plugged securely into the back of your computer.

Customer:   I can't reach.

Tech Support:   Uh huh. Well, can you see if it is?

Customer:    No.

Tech Support:  Even if you maybe put your knee on something and lean way over?

Customer:   Oh, it's not because I don't have the right angle, it's because it's dark.

Tech Support:   Dark?

Customer:    Yes. The office lights are off, and the only light I have is coming in from the window.

Tech Support:   Well, turn the office lights on then.

Customer:   I can't.

Tech Support:   No? Why not?

Customer:    Because there's a power outage.

Tech Support:   A power... a power outage? Aha! OK, we've got you licked now. Do you still have the boxes and manuals and packing stuff your computer came in?

Customer:   Well, yes, I keep them in the closet.

Tech Support:   Good! Go get them, and unplug your system and pack it up just like it was when you got it. Then take it back to the store that you bought it from.

Customer:   Really? Is it that bad?

Tech Support:   Yes, I'm afraid it is.

Customer:   Well, alright then, I suppose. What do I tell them?

Tech Support:   Tell them you're too stupid to own a computer.

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