TwitterMania Follow Up – Bubbling Signs

The WSJ has published this article: Why One Woman Is Eager to Buy Twitter Shares

You can read the full article directly at the WSJ and I am reposting some of the comments below. The point is that there’s a bubble mentality chasing the Twitter IPO and some tech stocks. It reminds me a bit of the tech bubble era of 1999-2000. Good old solid fundamentals such as profits and revenues growth didn’t have as much importance. What was important was the number of eyeballs and clicks your website get and whatever the cab driver recommends. The woman in the article is an administrative assistant. If administrative assistants are lining up to buy an individual tech stock, it’s a good bubble sign. Here are other highlights of the article, my comments are in bold.

“I messed up by not buying any Faceboob so I want to get some Twitter,” the 56-year-old administrative assistant said. “I messed up, I was being cheap.” No you did not messed up. FB plunged 40% after its IPO.

She said she’s not worried about price increases; she just wants to stick to her purchasing plan and buy the shares immediately, though she hasn’t ruled out selling them quickly if there’s a sharp bump. Clearly speculating, might as well go to the casino. No notion of valuation implied.

The good part
Ms. Watkins said she’s interested in the hyped stock because of her economics-major nephew and because she knows what happened with Apple Inc. and Facebook Inc. prices and doesn’t want to miss out, even though the 140-character message service, often used on smartphones, is largely foreign to her. “I don’t even use it,” she said. “You know what kind of phone I’ve got? A pre-paid!” ah! The economic major nephew. The Fortune 500 list is full of economists.

“I’m just buying because everybody’s talking about Twitter,” she said. “I’m just gonna take a chance.” Another sign of a bubble. That mean the stock will likely be overvalued. If you want to make money in the market you need to buy a bargain stock. You find bargain stock where nobody else is looking.


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