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(B)(N) The Very Social Media@RiskWerk

November 14, 2013
The Very Social Media Group

The Very Social Media Group

Deal Book. The Very Social Media™ Portfolio is up +100% this year but that’s not the whole story. When managed as a cash only Perpetual Bond™ it’s up +500% (in round numbers) and when leveraged prudently with the margin account, +862% and we’re not ready to sell the five of eight that we’re holding at the present time. The issue is “protecting our prices” and we know how to do that even if the holding times are atypically short in some cases.

Please click on the links The Very Social Media Prices & Portfolio and Portfolio & Cash Flow Summary for more details.

However, from an “investment” point of view, there’s really nothing there, there, dear. The group doesn’t pay any dividends, has a [P/E] multiple of 1500× earnings, a return on equity of 0.7% and a return on assets of 0.5%. Please see Exhibit 1 below.

Exhibit 1: The Very Social Media

The Very Social Media - Fundamentals

The Very Social Media – Fundamentals

Despite all of that, which appears to be nothing, the current “market value” is $200 billion and it’s up $83 billion for the year. And there’s more coming.

Lurking in the shadows are a dozen new amazing “services” that are but a whisper now but are tailor made for smart phones and tablets – we present AirBnBSquareSpotifyDropbox,  UberSnapchatPinterestBoxScribdFlipboard and King.com (The Associated Press, November 13, 2013, Beyond Twitter: The next wave of tech IPOs brews Wall Street could be awash in another wave of Internet IPOs after Twitter’s big splash).

Riding the Roller Coaster Courtesy: The Telegraph, UK 2009

This is a Great Stock!
And it might be.
Courtesy: The Telegraph, UK 2009

Absent the fundamentals, these deals will only make sense to us if we’re likely to get our money back and obtain a hopeful return above the rate of inflation.

But the price of risk resolves that dilemma for us and so we only buy and hold these stocks if the ambient stock prices appear to be above the price of risk, and for no other reason regardless of how glamorous and full of promise these stocks appear to be.

With results as illustrated. For more information and additional references to the theory, please see our recent Post, The RiskWerk Company Glossary.

And for more on what risk averse investing has done for us this year, please see our recent Posts on The S&P TSX “Hangdog” Market or The Wall Street Put or specialty markets such as The Dow Transports & Utilities or (B)(N) The Woods Are Burning, or for the real class actionLa Dolce Vita – Let’s Do Prada! and It’s For You, Dear on the smartphone business.

And for more stocks at high prices, The World’s Most Talked About Stocks or Earnings Don’t Matter – NASDAQ 100.

And for more on what’s Working in AmericaBig OilShopping in America or Banking in America, to name just a few.

Postscript

We are The RiskWerk Company and care not a jot for mutual funds, hedge funds, “alternative investments”, the “risk/reward equation” and every other unprovable artifact of investment lore. We have just one product

The Perpetual Bond
Alpha-smart with 100% Capital Safety and 100% Liquidity
Guaranteed
With No Fees and No Loads on Capital

For more information on RiskWerk, please follow the Tags or Categories attached to this Letter or simply enter Search for additional references to any term that we have used. Related data may be obtained from us for free in a machine readable format by request to RiskWerk@gmail.com.

Disclaimer

Investing in the bond and stock markets has become a highly regulated and litigious industry but despite that, there remains only one effective rule and that is caveat emptor or “buyer beware”. Nothing that we say should be construed by any person as advice or a recommendation to buy, sell, hold or avoid the common stock or bonds of any public company at any time for any purpose. That is the law and we fully support and respect that law and regulation in every jurisdiction without exception and without qualification to the best of our knowledge and ability. We can only tell you what we do and why we do it or have done it and we know nothing at all about the future or the future of stock prices of any company nor why they are what they are, now. The author retains all copyrights to his works in this blog and on this website. The Perpetual Bond®™ is a registered trademark and patented technology of The RiskWerk Company and RiskWerk Limited (“Company”) . The Canada Pension Bond®™ and The Medina Bond®™ are registered trademarks or trademarks of the Company as are the words and phrases “Alpha-smart”, “100% Capital Safety”, “100% Liquidity”, ”price of risk”, “risk price”, and the symbols “(B)”, “(N)” and N*.

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