Thanks. I'd fix it, but Tumblr is down! :)
1,078 karma · joined June 25, 2010
E: yoseph [at] relayfi.com L: ca.linkedin.com/in/yosephwest/ T: twitter.com/ycwest
I'm the author of the article and want to present a different perspective:
I don't think you're being completely fair to these guys. Sure, they're Apple enthusiasts but they're also digging significantly into the data to back up their analysis. For example, check out one users' analysis on Apple's Cost and Cost Ratios to Revenue: http://www.postsateventide.com/2010/11/apple-quarterly-compa... (Found here: http://www.macobserver.com/tmo/forums/viewthread/79667/).
I'm the author of the article and would just like to explain a couple things before discussing the article in more detail:
1. 50 Cent did not "pump & dump" this stock, as far as we are aware. We would certainly not condone that type of behaviour, as not only is it unethical but also illegal.
2. None of the members of the Vuru team nor any associated parties own any shares in HNHI.OB.
@artmageddon
We weren't trying to sweep his rap history under the rug. The title of the article calls him 50 Cent... What we were attempting to achieve was paint him as more than just a rap star with an entrepreneurial streak. In our opinion, he's more an entrepreneur with a musical streak.
Even in his music, he's focused on producing mass market rap. The type that rings up millions in sales. He's not as focused on the art aspect of it. Compare him to Kanye West who is certainly more focused on the art of music. 50 follows a specific formula to create hits and encourages all artists on his label to do the same. He's about the money.
@andyparkinson
We are working on some Value Investing goodness and I'm glad that you do follow us for our insights.
In relation to the Twitter debacle, the article's focus is on the rules 50 Cent follows in achieving strong investment results. While we'd agree that uneducated investors shouldn't buy stocks nor should any investors buy pink sheets, we think it's unfair to crucify 50 for pushing a stock that he believes in.
As Jesse Eisenberg questioned, "Is what 50 Cent did really that different from what happens all day long on CNBC when professional money managers take to the airwaves to praise the stocks of companies they already own?" We believe that they are similar situations, assuming 50 didn't know any bad non-public information about the stock and touted it anyways.
Nevertheless, I don't think it's a safe assumption that they could increase their revenue per user well beyond its current level. Generally speaking, it's pretty tough for free services to monetize themselves. The only routes seem to be ads & taking a cut of revenue from apps that run on its platform.
Facebook would really have to pull a rabbit out of its hat to increase its revenue per user well beyond its current level. It's certainly not a safe assumption.
Thanks for the comment. See my comments above for my discussion of the PEG ratio in this situation.
You're right that different companies have different growth rates at various stages. But, to me, it still doesn't add up.
From another comment I made below: "I understand the argument about growth, but even from that end, it doesn't completely stand up. If we were to use the PEG Ratio (http://en.wikipedia.org/wiki/PEG_ratio), for Facebook to be fairly valued at $50B, it has to grow its Net Income by 100% annually, on average over the next five years.
It's possible Facebook might be able to do that next year, but then it'll have 1 billion users. That's 14% of the world's population. That's huge. Being generous though, let's extend that 100% growth into the year after. Then, Facebook would have 2 billion users, 28% of the world's population, and assuming current margins, they would only be eeking out $2 billion in profit.
Will it be worth $200 billion then? I would say no and I would say Facebook's not worth $50 billion now."
Thanks for the response. I'm the author of the article (Macco, thanks for submitting it!).
You're right that the $50B valuation isn't based on current numbers. It's based on what Facebook might be able to do in the future. Imagine you were buying a house. It's a great house, has a solid foundation, beautiful interiors, and is in an excellent neighbourhood that is constantly appreciating. Would you pay what it might be worth in 3 years, today?
I understand the argument about growth, but even from that end, it doesn't completely stand up. If we were to use the PEG Ratio (http://en.wikipedia.org/wiki/PEG_ratio), for Facebook to be fairly valued at $50B, it has to grow its Net Income by 100% annually, on average over the next five years.
It's possible Facebook might be able to do that next year, but then it'll have 1 billion users. That's 14% of the world's population. That's huge. Being generous though, let's extend that 100% growth into the year after. Then, Facebook would have 2 billion users, 28% of the world's population, and assuming current margins, they would only be eeking out $2 billion in profit.
Will it be worth $200 billion then? I would say no and I would say Facebook's not worth $50 billion now.
At one stage or another, you will disappoint people. Find a way to get over it.
If you need to go over what you've accomplished, struggled with, etc, try doing a stream of consciousness. Open Word and just start typing. Don't stop until 30 minutes is up. Even if you're literally typing, "I'm writing this stupid sentence" over and over again, it doesn't matter. The words will come.
A stream of consciousness will help clarify your thoughts and help you realize what motivates you.
Might be what you're looking for...
It's a great read! It's guided my approach to life for the past couple years.
I started the same journey a few years ago, and looked at every approach under the Sun. The only one that made sense for me was value investing.
Since figuring that out, I never looked back. Remember "trading" is not the answer. "Investing" is.
To start off, here are the books I would recommend: 1. The Intelligent Investor by Benjamin Graham 2. F Wall Street by Joe Ponzio (Get a taster here: http://www.fwallstreet.com/article/25-calculating-the-value-...) 3. Security Analysis by Benjamin Graham
Feel free to shoot me an email if you have any questions. Email is in my profile.
This is a great piece of marketing. It provides me with some very useful information while selling me on your value prop.
Brilliant.
Hmm, this probably sounds very simple, but how long do clients generally take to decide? And maybe it's also better to think of it in terms of how long it takes to attach your design, photo, etc to an email, for the client to open the files from that email and align it on his screen...
I'd imagine that must take at least 5 minutes? I'm not particularly familiar with the area compversions is operating in, but you get the idea.
I like "Faster decision making".
Unfortunately, I don't have a link. I saw him give this speech in Toronto.
To properly articulate your unique value prop, you need to truly understand the value you are providing to users of your product. I know how difficult that can be when you're too close to your product. About a month and a half ago, I was in the same position.
Luckily, around that time, I heard the CEO of FreshBooks speak on the subject. Here's the gist of what he said:
Be able to tell users what life was like BEFORE your product and what it's like AFTER your product. Quantify it to make it real!
For example, if I've invented a teleporter...
BEFORE: On average 45 minute commute to work
AFTER: 0.015 second commute
Obviously, the big benefit of my invention is saving time. For yours, it could be cost, time, etc. Just make sure it's quantifiable!
And from there, writing your one sentence UVP will (hopefully) be much easier.
You need to provide us with more detail about what your application does.
But have you ever considered advertising on public transit? It's actually cheaper than you might think. I'm from Toronto and recently came across this article about advertising on our subway and tram system called the TTC: http://www.blogto.com/city/2010/10/ever_wondered_what_it_cos...
It might be worthwhile to check out your local subway system, if that form of advertising would hit your target market.
Over time, we refined, added to & changed those ideas and I now truly believe we have built something that's going to be a viable business.
Is this a common experience?