{"id":49017,"date":"2014-03-26T21:17:26","date_gmt":"2014-03-27T01:17:26","guid":{"rendered":"http:\/\/countingpips.com\/forex-news\/?p=49017"},"modified":"2014-03-26T21:17:26","modified_gmt":"2014-03-27T01:17:26","slug":"speculative-investing-in-technology-the-mark-zuckerberg-way","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex-news\/2014\/03\/26\/speculative-investing-in-technology-the-mark-zuckerberg-way\/","title":{"rendered":"Speculative Investing in Technology the Mark Zuckerberg Way"},"content":{"rendered":"

By MoneyMorning.com.au<\/u><\/a><\/p>\n

\n

‘We’re making the long-term bet that immersive, virtual and augmented reality will become a part of people’s daily lives.<\/em>‘<\/p>\n<\/blockquote>\n

For a minute, when we read that sentence we thought we were reading something from our resident technology and innovation<\/strong><\/a> expert, Sam Volkering.<\/p>\n

Immersive, virtual and augmented reality is exactly the thing Sam has banged on about in Revolutionary Tech Investor<\/em> since we launched the service last June. We discussed it yesterday in our regular monthly video update for Revolutionary Tech Investor<\/em> subscribers.<\/p>\n

But for a long time Sam was the only guy talking about this stuff anywhere. Most other folks were too busy worrying about whether the US Federal Reserve<\/a> would stop money printing.<\/p>\n

So, who is it that’s now making a ‘long-term bet’ on the kind of things Sam was talking about a year ago? Mark Zuckerberg, the CEO of Facebook [NASDAQ:FB]<\/strong> following the company’s US$2 billion takeover of technology<\/strong><\/a> firm Occulus VR Inc…<\/p>\n

Remember that this comes hot on the heels of Facebook’s takeover of messaging app WhatsApp<\/a> for US$19 billion.<\/p>\n

Zuckerberg certainly isn’t shy about splashing around the company’s cash on highly speculative business deals.<\/p>\n

But will any of these billion dollar deals pay off?<\/p>\n

That’s impossible to say right now. But it’s inarguable that Facebook had to do something to plan for future growth. There are surely limits to how much Facebook can make from allowing people to stalk and spy on each other.<\/p>\n

But this deal is important. It confirms everything we’ve tried to explain for the past year or more.<\/p>\n

\n

Life goes on<\/strong><\/h2>\n<\/p>\n

One reason we decided to launch a premium technology investment advisory last year was that we knew that whatever happens from a macro-economic perspective, life still goes on.<\/p>\n

People still buy things.<\/p>\n

Investors still invest in things.<\/p>\n

Companies still sell things.<\/p>\n

And importantly, entrepreneurs and capitalists still innovate and create new opportunities.<\/p>\n

The fact is, if you decide that you’ll only invest once all risk subsides and you think it’s safe to venture back into the market, the odds are you will have missed the best investment opportunities.<\/a><\/p>\n

As far as we can tell, our reasoning has been spot on. We’ve come across one trumped up crisis after another, and yet, what has happened?<\/p>\n

That’s right, stocks have gone up. In fact, from the date of Sam’s first Revolutionary Tech Investor<\/em> stock pick on 10th June last year the S&P\/ASX 200 has gained 13.5%.<\/p>\n

The NASDAQ Composite index has gained 22.1%.<\/p>\n

<\/a>
\nSource: Google Finance<\/strong>
\nClick to enlarge<\/a><\/em><\/div>\n

It’s a shame to think so many investors missed out on these gains because they were scared rigid of taking risks.<\/p>\n

But taking risks is what investing is all about.<\/p>\n

\n

Zuckerberg’s big investment punt<\/strong><\/h2>\n<\/p>\n

That’s exactly what Facebook CEO Mark Zuckerberg has done on a grand scale. Facebook has made two takeovers totalling US$21 billion.<\/p>\n

Zuckerberg has done this at a time when the world, investors and markets have been on edge about Russia and Ukraine.<\/p>\n

And yet, did that stop him splashing out US$21 billion?<\/p>\n

No, it didn’t.<\/p>\n

And while we don’t expect you to put that much on the line, or even to sell the family silver in order to buy stocks, we do recommend that you take a leaf out of Zuckerberg’s book.<\/p>\n

But in what way?<\/p>\n

Remember the type of stocks we’re talking about. These are the riskiest stocks on the planet. So you should only invest money that you can afford to lose.<\/p>\n

We’re not talking about your blue-chip dividend-paying stocks<\/a> that you should have tucked away, hopefully never to sell. You’ll make some nice returns from those stocks over time. But you won’t make the kind of ‘moon-shot’ returns that you can bag with the stocks Sam follows.<\/p>\n

\n

This is chump change to a multi-billion dollar company<\/strong><\/h2>\n<\/p>\n

One of the keys to speculative investing<\/strong> is to look at the big trends.<\/p>\n

That may seem an odd thing to say when we’re generally talking about such tiny stocks.<\/p>\n

But it’s the big trend that can make or break a company.<\/p>\n

Zuckerberg understands this. He’s invested US$2 billion into buying a company that makes an immersive technology<\/a> that looks like ski goggles.<\/p>\n

But although two billion may seem like a lot of money, it’s actually chump change. Facebook has a market capitalisation of US$165.3 billion. In other words, the takeover amounts to just 1.2% of Facebook’s market cap.<\/p>\n

Or put another way, it’s the equivalent of someone with a $100,000 share portfolio investing $1,200 in a speculative stock. Most investors in that position wouldn’t think twice about making a speculation like that.<\/p>\n

And yet when Zuckerberg does the equivalent with Facebook’s cash, cries abound of ‘tech bubble’ and ‘wasted money’.<\/p>\n

The reality is that Zuckerberg is taking a punt on a stock. And he’s doing it in exactly the right way. Relative to the size of the company (Facebook) Zuckerberg is making a tiny bet in exchange for what could be a huge return if the immersive, virtual and augmented reality markets begin to bloom as much as Zuckerberg – and Sam Volkering – expect.<\/p>\n

Cheers,
\nKris+<\/a><\/strong><\/p>\n

Ed note:<\/strong> The above article was originally published in The Daily Reckoning<\/em><\/a> US. Dr Marc Faber, the infamous ‘Dr. Doom’ will be speaking at our World War D conference on March 31-April 1. Make sure to check your inbox for Money Morning<\/em> on those days as we’ll be covering the event in detail. You can also follow us on twitter @MoneyMorningAU for live updates during the conference.<\/p>\n

From the Port Phillip Publishing Library<\/em><\/strong> <\/p>\n

Special Report: ASX: 15,000<\/a><\/p>\n

Daily Reckoning<\/em>: The Australian Dollar and a Cheap Money Addiction<\/a> <\/p>\n

Join Money Morning on Google+ <\/u><\/a><\/strong><\/p>\n

\n<\/img><\/a> <\/img><\/a> <\/img><\/a>\n<\/div>\n


\nBy MoneyMorning.com.au<\/u><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

By MoneyMorning.com.au ‘We’re making the long-term bet that immersive, virtual and augmented reality will become a part of people’s daily lives.‘ For a minute, when we read that sentence we thought we were reading something from our resident technology and innovation expert, Sam Volkering. Immersive, virtual and augmented reality is exactly the thing Sam has … <\/p>\n

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