[Editor’s Note: The following post is by TDV Editor-in-Chief, Jeff Berwick]
As I have stated in print, online, and in numerous interviews, we are now living in the most dangerous time for human capital in the history of the world.
Millennials are facing the brunt of this desperate time. After all, what kind of investments are Twitter, Bitcoin, and, namely, silver (since millennials, I assume, have less money than older more established precious metals bugs)?
Historically and relatively speaking, they are extremely risky choices, at least in the eyes of most professional financial analysts. More importantly, they are a sign of the times, which are extremely risky as well.
I wonder what Amerika's retail darling Macy's is thinking, now that Twitter, after but one day of trading and no revenue, has a bigger market cap than it? Surely, they must be slightly curious about market distortions.
Despite the lack of revenue to date, Twitter traded strongly on the New York Stock Exchange on Thursday. The company's IPO range is around $45 per share, meaning it's worth around $32 billion as of its first day of trading.
This was to the chagrin of some.
“The best minds of my generation are thinking about how to make people click ads,” former Facebook engineer, Jeff Hammerbacher, told Bloomberg Businessweek. “That sucks,” he added.
I don't necessarily think "that sucks". The ability to instantly connect is new and revolutionary. But, how do you put a price on social media that's reasonable? Especially since we can't even be sure what money is worth.
In my opinion Twitter is quite the disruptive technology (but nowhere nearly as disruptive as Bitcoin, a much better investment). To be certain, we ought not forget the role it has played in Twitter-facilitated revolutions.
- In 2009, Twitter helped organize people in Moldova after an election was perceived as fraudulent.
- In 2009 and 2010 the Iranian election protests, also known as Green Revolution and Facebook Revolution.
- The 2009 Iranian presidential election.
- The 2010-2011 Tunisian revolution, also known as Jasmine Revolution.
- The Wikileaks Revolution. The end, after 23 yeas, of the regime of Zine El Abidine Ben Ali.
- And then, of course, there was the Egyptian Revolution of 2011, in which the regime of Hosni Mubarak was ended after 30 years.
Twitter disrupted the information industry like many other peer-to-peer-type technologies in recent memory. For example, Twitter has made it potentially more beneficial for an independent journalist to tweet on his or her account a breaking news story before even writing the piece. They could gain instant notoriety and industry credibility.
Despite this, Twitter has yet to turn a profit. But, then again, only few companies have done so within an online business model.
So, what value does Twitter have?
One of the main online ways to profit in the future will remain advertising. Advertising is a more than trillion dollar per year industry.
Twitter will certainly depend on advertising, like so much of the Internet. (Though I think Bitcoin and 3D Printing will likely change this)
And although Twitter is still a small player in the digital advertising world, many analysts believe it has more promise for future revenue than Facebook does, justifying its market value, which increased by several billion dollars ahead of its initial public offering today.
Twitter is expected to make-up just 0.5%, or $580 million, of total spending on worldwide digital advertising this year. So, clearly, it has lots of room for growth.
Drew Backston, of Blackston Financial Group, is a millennial financial planner who responded to TDV inquiries regarding the simple question: "Twitter, Bitcoin, or precious metals?"
He told us: "As a financial planner I have a different view of investing than most of my generation. I see the markets on a daily basis and do research on all of our investing decisions. That being said, for myself I am still a little hesitant on the stock market. I remember 2001 and graduated during 2008 crisis. For me investing in risky assets (Twitter, Bitcoin, silver, etc.) must always be followed by other conservative bets (dividend payers/large cap)."
Brad Hines responded to our inquiry as well, stating that he is comfortable with risk. All investments have inherent risk, he reasoned. And that, with risk, comes the potential for profit.
"What I think about Bitcoin that I find of particular interest is that apparently as the more people have taken it seriously and begun using it, the more it has increased in value. I would therefore be interested in a possible short-term investment about it on the premise alone of it increasingly garnering press.
I have even less interest in Twitter's IPO from both being burned on Facebook's last year, and as well their essentially non existent earnings combined with likely over buying like with Facebook's."
For me personally, Twitter doesn't make sense. It's risky, yet not risky enough. We live in the most dangerous time for human capital in history. So, I'd rather put the pedal to the metal and take some serious risk.
That's where Bitcoin comes in. Whereas Twitter needs quantitative easing so people can continue investing counterfeit Federal Reserve notes into the stock market, Bitcoin simply needs people who love liberty and freedom. Oh, and sky high technology, too.
Twitter simply is not the sky high technology that Bitcoin is. It's also not physical, like gold and silver.
Comments or questions? Email us at TDV@dollarvigilante.com and we may use your email in our Feedback Friday each week.
