The purpose of this blog is to track 20 common stocks for a full year. The idea is to beat the S & P 500 like a mutual fund without the very high churn rate. These stocks will be held in a portfolio until next December 31.

Friday, May 18, 2012

What do Facebook and Jamie Dimon have in common


Today is the IPO for Facebook. Jamie Dimon is the CEO of JP Morgan Chase. It is my prediction that in 6 month, both will be worth a lot less than at the close of today.

I just do not see how Facebook can build itself without adding huge amounts of ads.  This will drive users away. They could go on a buying spree and buy themselves a conglomerate of tech companies, but valuation and integration have proven to be historical failures on these accounts. I see the price in the low 20s or teens.

Jamie Dimon will get kicked out of JPM.  I think the trading losses will spread to $5B. Everyone knows the trade now and anyone who can move a position against JPM has/is. Do not feel sorry for Mr. Dimon. He is a legend and a great mind.  He has been around huge money for a long time. He will not be unemployed long.
Maybe he will start a hedge fund and start making bets against large banks that are too big to fail. He will bet against institutions that combine government insured deposits and investments that rake in billions if successful and billions of loses (Govt insured) if failed.

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