In individuals, insanity is rare; but in groups, parties, nations and epochs, it is the rule. Friedrich Nietzsche
Facebook’s foray into cryptocurrency, blockchain, and Fintech will only increase that criticism. However, given Zuckerberg’s track record speculators and investors should pay close attention to Project Libra. Zuckerberg could build another money machine that will make many people rich while generating vast amounts of controversy.
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WhatsApp proves that Facebook is a mess. However; value investors should examine the Social Network, because Facebook is a mess that makes a lot of money.
For all its faults, Facebook is still a moneymaking machine par excellence. Facebook generated $11.552 billion in cash and equivalents and $30.757 billion in short-term investments during 2nd Quarter 2018. That gave Facebook an astonishing $42.309 billion in cash and short-term investments on June 30, 2018.
Is Facebook a classic Warren Buffett value investment? Uncle Warren loves to invest in moneymaking companies “that somebody’s idiot nephew can run.” Surprisingly, Facebook might fall into that category.
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You can think the NAMPOF of as a FANG for value investors. Holdings in NAMPOF are more diversified than FANG and some of them generate dividend income.
It diversifies NAMPOF because NVIDIA and Apple are hardware makers and PayPal is in finance. FANG scares me because it is almost all software based. Something I dislike about FANG is the lack of a financial stock.
Containing six stocks further diversifies. Four NAMPOF stocks; Apple, NVIDIA, Oracle, and Microsoft, are proven moneymakers.
I consider PayPal and Facebook speculative because they base their businesses on growth. However, both companies have showed the capability to generate vast amounts of cash.
I designed the NAMPOF to offer a little more than safety and income than FANG at a comparable rate of growth.
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The reason a person buys a tech company like Alphabet (NASDAQ: GOOG) or Microsoft (NASDAQ: MSFT) is that they generate a lot of cash. At the end of the day, Twitter simply does not have much cash.
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WhatsApp Pay is a peer-to-peer (P2P) payment solution similar to PayPal’s (NASDAQ: PYPL) Venmo that can be added to WhatsApp, the world’s most popular social messaging solution.
Facebook definitely has the potential to become a major player in Finance. If it works, WhatsApp Pay will be far more disruptive and valuable than Apple Pay ever can be.
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The California Democratic Party has sort of endorsed the idea of basic income. The concept is now mentioned in the
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What’s truly frightening is that Facebook’s audience decline is accelerating. eMarketer predicted that the Social Network will lose 2.1 million members of Generation Z (Americans under 25) in 2018.
The potential losses include 9.3% of users under 11; 5.6% of the users between 12 and 17, and 5.8% of those between 18 and 24, Recode noted. This means that the younger the person is, the less likely he or she is to go near Facebook.
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“We could hold Google and Facebook and all those big multinationals accountable; we could make sure that people; like those who are currently ‘voluntarily’ contributing their data to pump up companies’ profits are given something that is adequate to support their livelihoods in exchange,” Fuller said.
Fuller’s idea makes a lot of sense because most of those companies’ values come from the data they collect and disseminate. Figuring out how to charge a tax on that data will be difficult because much of its value is theoretical.
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These numbers indicate that Facebook’s ability to generate cash is almost as incredible as the extent of its’ social network. If these numbers are real, Mark Zuckerberg is one of the greatest business geniuses in human history.
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This humble fin-tech company has the potential to grow into a platform rivaling Amazon (NASDAQ: AMZN) and Google in size and scope. More importantly, PayPal has the potential to generate amounts of cash similar to those currently churned out by the monster banks or Goldman Sachs (NYSE: GS). PayPal is a value investment for the future.
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