The Scoble Experiment: Day 13 Report
The Scoble Experiment is proving to be quite fruitful. Less than two weeks in, despite the increasingly debilitating physical impacts, important findings are already being made.
The latest: confirmation of my hypothesis that Twitter users are stupid.
Yesterday’s bloody Monday in the financial markets was the talk of Twitter. And true to form, the twats demonstrated that they didn’t have a clue.
Here are some of the gems I managed to catch.
Robert Scoble himself is concerned about the impact of the crisis on the working class:
@AndyG1128 you are misunderstanding. People with great credit, like me, won’t be able to buy things like cars. Who does that hurt? Workers!
Poor Robert. From the looks of it, he’s credit rich and cash poor. And even though he apparently doesn’t have the ability to buy a new car outright, I’m hoping he’ll digg deep and buy a few extra iPhones to help the workers at Apple. It’s the patriotic thing to do.
pcnerd37 is looking to go bargain hunting:
Im thinking of buying some stocks now that they are really cheap. Anybody with a recommendation for an online broker? etrade? Scottrade?
When I informed him that he might as well just send me his money, he proved that if he signs up for a brokerage account it won’t take too long for the parties on the other side of his trades to wipe it out.
Venture capitalist Fred Wilson proved that he likes to try to catch falling knives:
Bought $GOOG @ 400.02 – verified by Covestor – http://www.covestor.com/h29251
In a later tweet, he explained, “i think its time to start accumulating it.” Might Fred make money? Sure, but he might also hit a jackpot in Vegas. Those who make money in the markets play probabilities, not hunches.
Bourgeois liberal Tim O’Reilly thinks “we need splurge” and that the $700 billion allocated to buy toxic debt as part of Paulson’s bailout proposal would instead be better spent on wind energy:
other things to do with $700bN: 350GW of installed windpower – 50% of US electricity (via Saul Griffith) (Tho I do think we need splurge)
Note to O’Reilly: printing money (for whatever purpose) is what got you into this mess in the first place. And if you didn’t notice, a lot of wind is being produced at your conferences. Harness that first, ask for money later.
Howard Lindzon, who stated that he’s been buying Google on the way down (for his children’s college education no less), celebrated a gain earlier today:
just sold some $goog that i paid $385 for at close. sweet
Let’s see: buy 50 GOOG at $385. Sell at ~$410. Holding 1000 GOOG with a cost basis of $550. You do the math.
These are but a few of the inane tweets I’ve seen on the subject of the financial crisis. From “liberals” who were against the bailout before the Republicans defeated it to “conservatives” who wouldn’t know fiscal conservatism if it hit them in the face, Twitter was an amusing, if still useless, distraction.
Frankly, I find it hard to keep up with the tweets of the ~2,000 twats I’m following and Twitter doesn’t make it very easy to keep track of “topics” (I suppose that would add too much efficiency).
Yet it’s still quite clear: if you agree that opinions are like assholes and have an affinity for assholes, Twitter is a can’t miss destination.
Why would anyone want to be buying stocks now? Throwing good money after bad. In my opinion, much of the wealth “created” over the past two decades was illusory. I’d venture to say that America (and possibly most of the EU, NZ, AU) are actually poorer than they were 10 years ago because of all the borrowing against then appreciating homes.
It’s not the end of the world but people may have to revert to the old way of doing things. Actually saving money to buy things.
K: dead on. What we’re seeing now is the end of a grand illusion. A magician created money out of thin air, gave it to the audience and has now caused it to vanish. The audience forgot that the money came into its possession through a magic trick.
As for “buying stocks,” I think there’s a distinction that needs to be made between traders and “investors.”
In this market, as a trader, I close out most of my positions before the end of the day. I’m looking for intraday scalping opportunities – on a down day, I can go short, on an up day, I can go long. I’m letting the charts tell me what to do. There’s lots of money to be made (and lost).
For smart “investors” who are looking to enter positions that they hope will eventually grow in value, the reality of the situation is that it’s not a time to be calling bottoms and frankly, it’s not really a time to be in the market. The massive flight of capital into save havens should tell everyone everything they need to know – lots of wealthy people are looking to protect principal, not grow it.
We could very well see a bailout agreement (there’s a huge amount of pressure now on lawmakers) and there could be a short-term bounce that gives bulls reason to believe if one is passed.
But the problem is that this crisis is about more than bad mortgage debt – it’s about flawed financial and monetary systems.
Paulson’s plan isn’t guaranteed to work, it doesn’t address the real ills that plague the financial system and it eventually risks the US dollar and the rating of the US Treasury to perpetuate the flawed system it’s supposed to fix.
All in all, there’s not a whole lot to be optimistic about and anyone who is touting stocks like GOOG and AAPL as bargains misses the big picture.
Agreed all around. My guess is that in this case Twitter is behaving like a chat room, and today everyone is pretending to be a pillaging contrarian. Especially the dufus who is looking for advice on eTrade vs. ScottTrade.
Plus, for each of the “success” story tweets you have to figure there are 10-20 tweets you’ll never see: “Shit! Bought at $100 and the bitch kept going down. Gave up and bailed at $63.” or “I’m beginning to think I should have started saving for Jr’s college some time before he turned 17.”
Brian: yes. Howard Lindzon is particularly amusing. He’s admittedly been buying Google on the way down so he’s almost certainly accumulated far more shares that are under water than he has with his scalp trade the other day.
I guess some people like to buy an entire downtrend so that they’re eventually be able to boast that they “bought” precisely at the bottom.
Not my cup of tea (it’s not profitable). And it’s kind of like celebrating the fact that on your fifth attempt, you finally shat in the toilet instead of on the floor.
Stupid == potential revenue source. This is how media works. Not that Twitter took any advantage of it thought: those questions are beyond Ev Williams competence: Blogger got almost shut down from inability to make money.