3/27/2018 Buy Facebook. Now?

Just gotta text:, "Facebook is on sale. If you can get in at $152, you've scored. :)"

Well I certainly want to score, so let's take a look.

For starters the 52 week low is 138.77, that is way South of 152.

Facebook has been in the news with Cambridge Analytica, and that is probably the MICRO force that drove the most recent drop.

However, more importantly, the stock market in general and tech in particularly is dropping and that is the MACRO force behind this curve.

The biggest problems Facebook has at this time are:

1) Loss of younger people to other services such as Snapgram and Instachat.

2) The side effect of the fake news, extremists, trolls etc, is an increasing number of people are just getting tired of it. And since the FB business model is to sell your data, that is, in a word, bad.

Conclusion: buying on dips is smart. There probably are bargains out there in tech world. AMD, for instance is well worth watching. But, at the current price point, I will pass on FB, if they hit 80 wake me up!

Walmart

03/20/18 CNBC has an article on a pilot project: Fedex store within a store at Walmart. I never put a lot of stock in pilot projects, but this is interesting. AMZN makes noises from time to time about their own delivery systems, that could make this tie up good for both Fedex and WMT. The big thing for me is that the photo printing part of all of the Walmart stores I have visited "feels" like an after thought. Imagine a section devoted to packing, copying, shipping. Worth watching, could be big. If the pilot makes it to Kauai, I will be sure to take note.

03/05/18:
"I don’t see how anyone can buy WMT stock at 26 times earnings when those earnings not only aren’t growing, but have been shrinking. If Walmart stock was paying a 5% dividend, that might make for a different story, yet it only pays a 2% yield."
https://investorplace.com/2018/01/its-too-late-for-walmart-turnaround/

I don't have my full brain on, I meant to take a nap, but was productive so I stayed at the keyboard. So maybe I am wrong, but doesn't that just mean their stock, like everyone else's is overpriced?

My moma would never allow me to use the everyone else argument. So, the rich question is for the ten thousandth time, whither goeth Walmart.

Some thoughts:

Walmart is the largest retailer in the world. Period. Forget all the Amazon hype, they aren't even close.

90% of Americans live within 10 miles of a Walmart.

Walmart is trying harder at online retail. Yawn. I used to travel for a living, no matter where I was, I could find a Walmart store . . . AND they are not always tied to big box shopping centers . . . AND their parking lots are not empty. . . even at night. If I want it in a cardboard box, I will use Amazon, if I am in Lihue and I want to pick something up, Walmart works for me. 

The dividend. Is 2 something measly or smart? Take either side of the argument you want, but it is sustainable.

Warren Buffet is selling it. OK maybe I can add to my position on a price drop.  

Annuities are bad for you?

Article I found on Yahoo Finance says:

"If you’re unfamiliar with annuities — you give an insurance company your money and in return they pay you an income stream, usually for the rest of your life. In some annuities, if you die before you’ve received all of your money back, too bad for you. The insurance company keeps the money."

"Essentially, you’re betting the insurance company that you’re going to live longer than they think you will. They take your money, invest it and give it back to you in dribs and drabs (with steep penalties if you want to withdraw more than the contract states)."

If your biased journalism spidey sense is tingling, that makes perfect sense. The author, while badly biased, is sort of correct, things to consider:

- Annuities come in many flavors, in general, the more complicated one is, the farther you should stay away from it.
- Some of these do have very high commissions, the 5 - 7% the salesman pockets comes directly out of the money you need to live on. The salesman needs to eat, but maybe hamburger instead of filet mignon, make sure you understand the commission structure.
- Kathy and I both have one from AARP/NY Life, you pay a lump sum, you receive a payment for life. Seems like a reasonable part of a retirement strategy to me. Simple, you know exactly what you are going to get. Highly recommended if you can afford it.
- Because it is a fixed payout, things like the interest rate environment impact your payout. In general, if you are in a rising interest rate climate, look for the guaranteed payouts to increase.

In closing, let me use an example. Supposed you invested $35k in Amazon in September of 2015 @$500 a share. And you are still holding it today at $1,500 a share and change. Is it likely to triple again? Certainly not that quickly? Do some people feels stocks are currently overvalued? Yes, in March 2018, many analysts feel stocks are on the high end of valuation.  And suppose you are between 55 and 65 years of age. Is it dumb, to take that money, buy a one time premium annuity, and start getting checks for ~$500/month for the rest of your life?

Seems like part of a rational portfolio to me.