4 ms·

I place a lot of value on Spiegel's view of the market. As the CEO of one of the "hottest" startups in the past couple of years, I think he has access to a lot

I place a lot of value on Spiegel's view of the market. As the CEO of one of the "hottest" startups in the past couple of years, I think he has access to a lot of people and information that most of us don't. I'm a believer in semi-strong market efficiency to be sure. If he is turning down valuation money, he is also explicitly acknowledging that the fundamentals of the company simply don't justify the leverage of taking on additional investments. He uses startup era Facebook to inform many of his decisions. Monetization is where Snapchat is finally breaking from Facebook's precedent, allowing the user to opt into ads disguised as high-quality content, and adding a money-sending service by partnering with square. Personally, I find this strategy a lot more effective than Facebook's attempts: jamming ads down users' throats, auto-play videos, breaking messenger off of the main Facebook app, selling robot clicks and false engagement, etc. Should be interesting to see how Spiegel is planning to ride out the readjustment that he is predicting.

morky 12y ago
Yeah agree with this, FB model is old school.
- cbsmith 12y ago
  ...though paying off handsomely.
dredmorbius 12y ago
Yep. I also found that quite interesting. It's quite similar to my own view ... let's see, an October 12 variant: Twitter, and much of the rest of the Web 2.0 / dot com firms mostly are solving the problem of "where can we invest all of this free money the Federal Reserve is pumping out while real financial returns are so low. The fact that much of the business model supported by these ventures is effectively advertising, and that a lion's share of the advertising is itself FIRE (Finance, Insurance, Real Estate) sector -- also bolstered by easy money / liquidity / QE2, or electronics goods, dittos, makes me think that this is all one hell of a massive bubble. At some time it's going to pop, and it's going to be all kinds of ugly -- the dot-com bust will look like salad days in comparison. (Comment on the post in question) https://plus.google.com/104119855035793551431/posts/QQrWKvBxKRz https://plus.google.com/104119855035793551431/posts/QQrWKvBx... So, yes, Spiegel's comments on the Fed and money are pretty interesting. Not sure if it's confirmation bias on my part or just confirmation.
- roymurdock 12y ago
  I'd be interested to hear how you're betting on the bubble. Are you shorting stocks? Buying puts? Some kind of real estate ETF? Are you actively betting or just sideline speculating? Not trying be passive aggressive - I've just been trying to come up with a good strategy myself to bet on an imminent bubble. Also, could you provide more detail on how QE money is ending up in VC pockets? I was under the impression that most of the large-scale-asset purchase money is simply sitting in bank reserves - check out the 2nd graph showing how much of QE has actually made it into circulation [0]. I'm not sure exactly how the "free money" of the Fed is ending up in Twitter's coffers. [0] http://www.frbsf.org/economic-research/publications/economic-letter/2012/july/monetary-policy-money-inflation/ http://www.frbsf.org/economic-research/publications/economic...
  - dredmorbius 12y ago
    I'm taking a longer-term view and investing in personal capital on the basis of that. Money in bank reserves doesn't, of and by itself, provide revenue growth. Banks put the money someplace else. Some of that goes back into Government paper. Some into offshore tax havens (the avoided tax is an immediate gains). Some 10-20% of all finanicial wealth is there -- $21 - 30 trillion as of this past July: http://www.winnipegfreepress.com/opinion/editorials/close-down-offshore-tax-havens-267286871.html http://www.winnipegfreepress.com/opinion/editorials/close-do... Other funds end up in various investment operations -- some are HFT, some are speculating in commodities or other real assets (stories of Goldman's operations in this area are interesting), some ends up chasing tech opportunities -- it's one of the few economic sectors offering much promise. Though I suspect a lot of it's overrated. Most present "investment opportunities" strike me as quite ephemeral, though the volatility may allow for gains for the extremely astute. Or lucky.

morky 12y ago

Yeah agree with this, FB model is old school.

cbsmith 12y ago
...though paying off handsomely.

dredmorbius 12y ago

Yep. I also found that quite interesting. It's quite similar to my own view ... let's see, an October 12 variant: Twitter, and much of the rest of the Web 2.0 / dot com firms mostly are solving the problem of "where can we invest all of this free money the Federal Reserve is pumping out while real financial returns are so low. The fact that much of the business model supported by these ventures is effectively advertising, and that a lion's share of the advertising is itself FIRE (Finance, Insurance, Real Estate) sector -- also bolstered by easy money / liquidity / QE2, or electronics goods, dittos, makes me think that this is all one hell of a massive bubble. At some time it's going to pop, and it's going to be all kinds of ugly -- the dot-com bust will look like salad days in comparison. (Comment on the post in question) https://plus.google.com/104119855035793551431/posts/QQrWKvBxKRz https://plus.google.com/104119855035793551431/posts/QQrWKvBx... So, yes, Spiegel's comments on the Fed and money are pretty interesting. Not sure if it's confirmation bias on my part or just confirmation.

roymurdock 12y ago
I'd be interested to hear how you're betting on the bubble. Are you shorting stocks? Buying puts? Some kind of real estate ETF? Are you actively betting or just sideline speculating? Not trying be passive aggressive - I've just been trying to come up with a good strategy myself to bet on an imminent bubble. Also, could you provide more detail on how QE money is ending up in VC pockets? I was under the impression that most of the large-scale-asset purchase money is simply sitting in bank reserves - check out the 2nd graph showing how much of QE has actually made it into circulation [0]. I'm not sure exactly how the "free money" of the Fed is ending up in Twitter's coffers. [0] http://www.frbsf.org/economic-research/publications/economic-letter/2012/july/monetary-policy-money-inflation/ http://www.frbsf.org/economic-research/publications/economic...
- dredmorbius 12y ago
  I'm taking a longer-term view and investing in personal capital on the basis of that. Money in bank reserves doesn't, of and by itself, provide revenue growth. Banks put the money someplace else. Some of that goes back into Government paper. Some into offshore tax havens (the avoided tax is an immediate gains). Some 10-20% of all finanicial wealth is there -- $21 - 30 trillion as of this past July: http://www.winnipegfreepress.com/opinion/editorials/close-down-offshore-tax-havens-267286871.html http://www.winnipegfreepress.com/opinion/editorials/close-do... Other funds end up in various investment operations -- some are HFT, some are speculating in commodities or other real assets (stories of Goldman's operations in this area are interesting), some ends up chasing tech opportunities -- it's one of the few economic sectors offering much promise. Though I suspect a lot of it's overrated. Most present "investment opportunities" strike me as quite ephemeral, though the volatility may allow for gains for the extremely astute. Or lucky.