Thursday, January 31, 2013

Facebook: Lucrative Undervalued Stock Du Jour?

Even though its stock price had been heading south since its initial offering back in May 2012, is Facebook stock now overdue for a “Bullish” rally?

By: Ringo Bones

With Facebook CEO Mark Zuckerberg adding a Graph Search feature to his famed social network site, it seems that Facebook would have already made some very enthusiastic friends in the more conservative Wall Street circles, but unfortunately it didn’t. With such “temporary” setback, is Facebook now overdue for a Bullish rally of its stock price? After all, business actuaries have valued it at 100 billion US dollars – making the famed social network more valuable than Bank of America or McDonalds.

Unfortunately, even if it is being sold as a lucrative “online advertisement engine”, conservative Wall Street types had never been convinced by the rather “unsubstantiated” valuation of Facebook. Thus its stock price, despite after the lockup period expired back in November 2012 is still going south of its May 2012 IPO price, but will it rise again someday? After all, it has already over 1 billion users.

There are a number of reasons why Facebook’s stock price could eventually rise in the future. First, Facebook is now getting 23% of its revenue from mobile smart-phone users which also forms the bulk of its advertising revenue, and then its revenue jumped 40% to 1.6 billion US dollars during the last quarter / October to December 2012 period. But despite such good news, Facebook share prices fell again after the recent announcement of its last-quarter earnings for 2012.

Primary because of the 80% profit fall to just 64 million US dollars and the most important factor is that the somewhat conservative outlook of the Wall Street Ivory Tower is still not convinced on Facebook’s 100-billion US dollar net worth. Will Facebook stock prices eventually rise someday? I'm not holding my breath. 

Wednesday, January 23, 2013

Silver: Safe Haven Investment of Choice for 2013?

Despite being relegated as the “poorer cousin of gold”, is silver now poised to become one the safe haven investments of choice for the year 2013?

By: Ringo Bones

As one of the top four precious metals – along with gold, palladium and platinum - that are traded on a per troy ounce that appear on the world market’s commodities tick , silver is on average 55 times cheaper than gold. And yet silver has been steadily rising in value – along with gold – since we have been hit by the global credit crunch back in 2008.

Even though this is a rare period in history where gold is now “slightly” more expensive than platinum despite gold being 1,000-times more plentiful than platinum on the Earth’s crust, platinum rose in value by 10% back in 2012. And not to be left behind, silver managed to rise in value by as much as 8% back in 2012 too, so does this mean that silver is now poised to be the safe haven investment of choice for 2013 for those wanting to have a more diversified safe haven investment portfolio?

Back in January 8, 2013, Gregor Gregersen, chief executive of Silver Bullion in Hong Kong says that during the first week of 2013, there has been a sharp increase of purchases of silver bullion and numismatic quality silver coins from his silver retail outfit and if trends continue, silver’s value could rise by as much as 500% during the next three years. And silver is still currently used to back the value of paper currencies in the banking systems of both the United States and The People’s Republic of China.

Despite the film-based sliver nitrate and silver halide based chemicals used in old-school “analog” film based photography being replaced by digital photography almost overnight that virtually relegated film-based photography to the technological dustbin of history, silver is still used for ultra-low electrical resistance traces on printed circuit boards and electrical connectors of today’s latest digital cameras. Looks like silver could well become the next safe haven investment of choice for those willing to diversify their own safe haven investment portfolio.

Thursday, January 3, 2013

The Fiscal Cliff Deal: Politics Over Economics?

As the “feverish bullish” market rally now seems to peter out, is the short-term Fiscal Cliff Deal nothing more than dysfunctional politics trumping over economic common sense?

By: Ringo Bones

Well, at least America’s economically embattled middle-class wasn’t thrown under the bus this time around and as for “Dictator of the House” Boehner supposedly getting his well-deserved defenestration off the Fiscal Cliff would have to wait another time, many economically savvy individuals now wonder if the short-term Fiscal Cliff Deal nothing more than “kicking the can down the road”. The next insurmountable hurdle facing an increasingly partisan Capitol Hill will be the Debt Ceiling and the U.S. Republican Party’s push for very unreasonable Federal spending cuts (aimed at primarily Democrat-legislated programs?) by March 2013. Will this two issues spook the markets yet again?

The short-term deal that staved off the looming Fiscal Deal that House Republicans played brinkmanship until the last second did manage to generate a post-New Year market euphoria back in Wednesday, January 2, 2013 seems now starting to inevitably peter-out as wary investors around the world start to wonder whether a partisan “deadlock” of the Debt Ceiling and Federal Spending Cuts Deal that needs to be deliberated by March 2013 will spook the markets yet again. Given that President Obama won’t do a repeat of the heated reaching across the partisan divide type of negotiations that averted the Fiscal Cliff on raising the Debt Ceiling and the GOPs proposed very unreasonable Federal spending cuts sans raising taxes on the richest 1% of America, this would certainly spook the global markets yet again.

The good news is that America’s low and middle income classes won’t be facing an increased tax burden if the looming Fiscal Cliff hasn’t been averted. The bad news is that the US government’s Debt Ceiling will reach the 16.4-trillion U.S. dollar mark in a few weeks time. A “new deal” on balancing the Federal government’s budget deficit that doesn’t involve a more progressive taxation scheme – ending the Bush era tax cuts on the top 1% of America that never seemed to trickle down for over a decade now - and spending cuts on not-so-essential government programs will only widen the partisan divide, as opposed to bring in a sense of both fiscal and economic sense, to the runaway spending at Washington, D.C.