Jack Bogle calls facebook a "fad"

Discussion in 'Wall St. News' started by S2007S, May 22, 2012.

  1. S2007S


    I don't know whats taking so long for more people to jump in and say this is entirely a fad, that's all it is and people keep getting sucked into it. Hopefully facebook is the last hyped social networking fad company to go public, do we really need more of these companies being listed, like zynga and groupon. This is just a fad, unless facebook can come up with a really quick way to monetize the use of its 950+ million members its pretty much useless. They should have been making strides with the amount of people using their service over the last 3-5 years, but haven't. All they can come up with just like any other social networking company is "advertising" that's it. And we have seen some of the statistics that show its not working as planned. Who clicks on these lame ads that are all over the net. I know I don't.

    Facebook 'Classic Example of Investor Greed': Bogle
    CNBC.com | May 22, 2012 | 03:25 PM EDT

    Facebook's dismal initial public opening was a product of greed and dangerous investing in "fad" Internet social networks, Vanguard CEO Jack Bogle told CNBC Tuesday.

    As the Facebook IPO continues to get slammed in the open market, the famed buy-and-hold value investor and index fund advocate expressed little sympathy for the wave of negative headlines Facebook is enduring.

    "This is a classic example of investor greed, including institutional greed and underwriter greed and company greed," he said on CNBC's "Street Signs" program. "So the message is, when all the parties to a transaction are greedy, this is the kind of outcome you can expect."

    Facebook [ FB 31.00 -3.03 (-8.90%) ] debuted on the market Friday and priced at $38, at the top end of its expected range. But trading opened a half-hour later than scheduled because of technical glitches at the Nasdaq trading platform, and the momentum only got worse from there.

    While the stock finished its first day slightly higher, it got crushed on Monday, losing about 11 percent, followed by another substantial loss Tuesday.

    For Bogle, the slide in the much-hyped Facebook is typical of the perils investors face when trying to pick individual stocks.

    "Nobody can predict their price performance, nobody can predict their future value," he said. "While nobody can predict the future price of the total stock market, we can predict its future performance, which depends clearly and 100 percent on how the underlying American economy does, how corporations do in the long run."

    While acknowledging that U.S. growth is likely to be slower than in the past, he said betting on the economy is still safer than putting faith in startups and IPOs.

    "Stocks can do what they wish and to some extent the market can do what it wishes," Bogle said. "But when you look back at the grand wave of IPOs, the new economy and Internet and information age back in the late '90s and early 2000s, it's a fad. It's in the price of the stock and people are looking for a free ride upward in the new world. Truth be told, the old world persists in making its reality felt."

    "I remain buttressed somewhat by Facebook and the other Internet and social network companies that are lined up out there," he added. "Watch out. It's a dangerous game."
  2. bogle is a moron. he should be in a nursing home.
  3. S2007S


    I dont agree with some things he says, but this one I agree with, its a fad, thats all it is. Unless they can come up with a way to make money without only depending on advertising then maybe it would be a good investment.

    Remember there are a little over 7 billion people in the world, out of the 7 billion people about 2.3 billion are on the internet.

    Will facebook ever have 2.3 billion people facebook? Probably not. Eventually they will peak and start to lose members. They wont be growing 100% year over year like they were just a few years back, they cannot grow at 100% a year at this point, its easy to grow 100% a year when you have 845,000 members, but when you have 1 Billion, not quite easy, actually impossible. If they can only earn $1 billion in revenue a quarter with nearly 1 Billion people using facebook what is going to happen if that number starts to drop? Look at AOL back in the 90's everyone thought for sure it was going to keep on growing, well it didnt. Myspace had millions of people they all left, remember when Nextel had millions of subscribers, today no one knows what or who nextel is. What Im saying is this is nothing but a fad, a trend that is going to end. It might be here for a few more years, but eventually people are going to say Im bored of this, time for something new, they always look for the next trend and when they do facebook will be over with.
  4. Bogle is sharp as a tack, but he's of the Model T era. I can't imagine he's much into anything beyond vacuum tubes. Ironically, he'll have to buy it when added to the S&P.
  5. FB has 800 Mill+ users. That is a heck of a fad. Of course, that doesn't make it a good investment.

    I have a lot of time for Bogle, but it's not like the mutual fund industry has done all that well for people who followe his advice to just sit there through massive drawdowns.
  6. Thats a good point about AOL. Remember that just 12 years AOL was Valued at about $200 billion. Todays its valued at 2.5 billion.
  7. I heard Bogle does not even know how to use the internet
  8. Social Media is a paradigm shift and Facebook is the major player. Anyone who thinks it's a fad isn't surveying the current landscape.
  9. Facebook has 800 mill+ accounts, not users.
  10. truth... facebook doesn't have 800 mil users, have 800 mil account's..

    i have 3 account myself.. one for me , another for a business i have, and the last one a fake to meet ladies without my girlfriend notices..

    i think if facebook monetize membership on the site i would'nt be so great and eventually it will loss a vast number of users... so reazonable profit for them is advertisement... but remember they also have cityville and a wide variety of games where you have may purchase coins or things like that. like habbo..

    i wouldn't bet on FB, as almost everybody here thinks i also would say is a fad or even a bubble...

    I go long with AMLN...
    #10     May 22, 2012