Facebook Continues To Be The Stock To Own In 2017 – Facebook (NASDAQ:FB)

Shares of Facebook (NASDAQ:FB) continue to move higher this year and the move may not be over. The social media giant has now dipped its toes into the pool of one of the largest investing theories the world has seen manifesting itself right before our eyes; the stay at home economy. Shares of companies like Netflix (NASDAQ:NFLX), Amazon (NASDAQ:AMZN) and Domino’s Pizza (NYSE:DPZ) have skyrocketed over the past year while shares of quick serve restaurants like Cracker Barrel (NASDAQ:CBRL) or Buffalo Wild Wings (NASDAQ:BWLD) and mall related stocks like Macy’s (NYSE:M) have been relatively stagnant or been plummeting (see chart below). Facebook is now trying to participate in this massive socioeconomic shift by entertaining pitches for video content.

Source: Google Finance

To broaden its offerings in making revenues grow, the company is looking to offer original programming content on its platform. The company is looking to offer its users content which lasts approximately thirty minutes in six genres. The focus will be on sports, science, pop culture, lifestyle, gaming, and teens and is looking to procure the content for them as opposed to opening a studio of its own.

The pricing model that is currently being entertained is something from the low to mid six digits per episode along with a piece of the ad revenues. Original content has been a hot trend the past couple of years which was kicked off by House of Cards. With Facebook’s foray into the space, it will certainly crowd the market for Amazon and Netflix, but because more and more people are staying at home, the pie should continue to grow. The Facebook ecosystem can only become stickier now among its users as it tries to hold on strong to the social media crown with an offering of this nature.

This is perhaps Facebook’s attempt at copying Snap’s (NYSE:SNAP) Discover which was launched a little while ago which makes it another feature the company is imitating from Snap if you include the Stories feature. Snap’s Discover allows users to view content curated by other users as opposed to friends. Imitation is the best form of flattery I guess, right? But this goes to show that there isn’t anything unique about what these guys do from a product perspective. This will be a war where the best management team will win. And right now Facebook is the management team that has built its credibility with Wall Street with Snap having a lot to prove.

Before this news I felt that the only direction for Facebook this year was higher. I predicted that it’s the stock to own in 2017, and so far, I have been proven correct. So, in addition to the shares I own in my Portfolio of 12, I levered a different portfolio with the purchase of a couple of call options at the $135 strike for the March expiration. Right now the value of those calls have decayed from what I originally purchased them at, but when I purchased those calls, I funded the purchase by writing $120 strike March expiration puts and $140 strike March expiration calls for a net credit of $0.15.

I actually initiated my position in Facebook in late November and have been pretty happy with the purchase thus far. I will only be purchasing shares if they are below $121 because I believe that is where Facebook offers additional value. I’ve selected $121 because it is the average of the 52-week range.

I swapped out of Priceline (NASDAQ: PCLN) for Facebook during the 2016 fourth-quarter portfolio change-out because I ended up turning a profit in the name (32.7%, or 33% annualized) and wanted to lock in those gains. Since the swap, it has been a pretty even trade. For now, here is a chart to compare how Facebook and Priceline have done against each other and the S&P 500 since I swapped the names.

Source: Google Finance

When it is all said and done, it matters what the stock has done in an investor’s portfolio. For me, Facebook is one of my larger positions and has been doing well as I’m up 12.9% on the name while the position occupies roughly 9.6% of my portfolio. I will make purchases in the stock only if it is below $121.

I own Facebook for the growth portion of my portfolio and I will continue to hold onto the stock for now. My portfolio is up 16.7% since inception while the S&P 500 is up 14.6%. Below is a quick glance at my portfolio and how each position is performing. Thanks for reading and I look forward to your comments.

Company

Ticker

% change incl. DIV

% of Portfolio

Facebook, Inc.

12.86%

9.63%

AbbVie Inc.

(NYSE:ABBV)

8.49%

3.99%

PulteGroup, Inc.

(NYSE:PHM)

1.85%

3.73%

3M Company

(NYSE:MMM)

1.14%

3.71%

SEI Investments Company

(NASDAQ:SEIC)

0.98%

7.41%

O’Reilly Automotive, Inc.

(NASDAQ:ORLY)

-0.25%

3.66%

General Electric Company

(NYSE:GE)

-2.08%

6.18%

Wyndham Worldwide Corporation

(NYSE:WYN)

-2.27%

3.58%

V.F. Corporation

(NYSE:VFC)

-3.38%

9.61%

Valero Energy Corporation

(NYSE:VLO)

-4.13%

3.51%

Gilead Sciences Inc.

(NASDAQ:GILD)

-12.93%

19.91%

Silver Wheaton Corp.

(NYSE:SLW)

-13.47%

7.52%

Cash

$

17.57%

Disclaimer: This article is in no way a recommendation to buy or sell any stock mentioned. This article is meant to serve as a journal for myself as to the rationale of why I bought/sold this stock when I look back on it in the future. These are only my personal opinions and you should do your own homework. Only you are responsible for what you trade and happy investing!

Disclosure: I am/we are long FB.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: In addition to the shares I own I am long the March $135 call, short the March $120 strike put, and short the March $140 strike call.

The Power Of Facebook Communication

In the pre Internet days, there were shopping malls and markets. In the post Internet days, there was social media like Facebook.

Though market research is important, you need to positon yourself where there are many people searching for different products to meet their various needs. And Facebook is one good example. In fact we are going to talk about how to communicate effectively there.

How successful you are running a business today depends on how well you understand people and whether you can meet their needs. Whether you are a business owner, marketer or even a neutral, you will definitely be curious as to why people buy. Despite the hype by most gurus, the mystery is still a mystery unless you take action by learning from those with proven credibility and applying what you learn everyday. Apart from offline markets, the same concept applies to Facebook.

You may ask yourself: What has Facebook got to do with all this?

Well, recent studies have indiciated many members did a great deal of product research before deciding whether or not to buy. They did this by asking their friends and seeking their opinions the same way they used to do via phones and face-to-face meetings. They even formed groups pertaining to that topic.

What used to happen through TV and movie advertising which could only applied by companies and business owners with big budget is now happening online and applied by everyday people like you and me with small budget. You can see ads there just like what you see in major search engines like Google.

Word of mouth still played a significant role in viral marketing. Only this time people typed to express their views instead of voicing them out.

A search for your favorite brand, product or topic can result in numerous discussions. Through these discussions, you will have a better understanding of what the market thinks and will do.  After all, it is still the opinion of most people that really matters irregardless of what you promote. So those promoting what they think the market wants makes a huge mistake and left a huge amount of potential commissions on the table.

Therefore, you should not use Facebook the same way as you used classified ad sites by blasting ads. Unless you want to put up a Facebook ad like how you do PPC campaigns with Google Adwords, your goal is to build a following of people with the common interest to you. Those that are in your niche will be more likely to buy from you than any Tom, Dick and Harry.

Once you have done so, you need to build rapport, trust and understanding with them next. Find out their needs and wants. Then you offer them products as solutions. By doing this, it will save you hours of market and product research.

Like it or not, it is how people react to you that will make or break your iife. So you have to treat them like how you want them to treat you – as people. Most marketers treated them as cyber income providers by making a lame offer on what they promote. At the end of the day, it is sincerity that really matters.

In a nutshell, that is the power of Facebook communication. It is no longer just a social network exchange among friends but on anything that excites and interests them. This will in turn spread to friends of friends and so on and forth. This is also what viral marketing is all about on social media.

Hard-working mum advertises schoolboy son’s services for FREE on Facebook to get him out house

FACEBOOK FREEBIE

Donna Cooper offered 16-year-old Nick on social media after he was put on a restricted timetable at school

A HARD-working mum advertised her son’s services for free on Facebook – over fears he was lounging around at home.

Donna Cooper put 16-year-old Nick up for hire on social media after he was put on a restricted timetable at school.

Nick’s services were put up for hire on social media

Nick’s services were put up for hire on social media

Donna was praised on Facebook for her actions

Facebook

Donna was praised on Facebook for her actions

Within a day of it being posted, the owner of Beach Hut Café commented and offered him work.

“I walked in from work and told him he had a shift at a café the next day”,  Ms Cooper, of Beeford, told the Hull Daily Mail.

“I was so angry with him I knew I had to find him something to do,” she said. He wasn’t too impressed but he got on with it and the owner of the café couldn’t have been happier with him.”

The last thing Ms Cooper wanted was for her son to become lazy, and so took it upon herself to find him work.

“I wasn’t prepared to have him at home unsupervised while me and my partner were out at work all day,” she said.

“I can’t be doing with laziness and he wasn’t going to be sat at home on his Xbox or Playstation doing nothing productive.


“He has been put on a restricted timetable but he is a hard worker and is very polite. School just doesn’t seem to agree with him.”

And not only did he end up with shifts at the café but he has since been offered a two-week trial for a joinery apprenticeship at a firm in Leven.

“I wanted him to gain an education in life and now thanks to the post he has been offered a two week trial for a joinery apprenticeship in Leven,” said his mum.

One person commented on Facebook: “Great idea! Teaching your son that if he isn’t going to be at school then he has to use his time productively then he might just decide that school isn’t so bad after all. Hats off to you.”

Donna’s Facebook advert for her son’s services

Donna’s Facebook advert for her son’s services

However one comment stood out, which showed Nick to be not only hardworking and polite, but a potential life-saver.

One woman wrote : “This young lad picked me up and took me home. I had had a horrific fall and if it hadn’t been for Nick I probably would have died so thank you. A lovely young man.”

Ms Cooper said: “Some kids expect jobs to fall on their laps. Nick complained about the café work at first but he went on to do a brilliant job. He now has a great reference to be able to find other work.

“I wanted to teach him that you need to put yourself out there. I got the number of the apprenticeship company for him but I left him to it after that. He managed to organise an interview for himself while we were at work, and now he has a trial doing a job he has always wanted to do.”

Facebook tests reaction and Dislike button (!) on messages


Facebook finally has a Dislike button, but it’s not where you’d expect.

How do you reply to a specific message in a rapid-fire chat thread? Facebook wants you to attach emojis to your friends’ messages the same way you do with News Feed posts.

 

facebook-messenger-reactions

Hover over a message and tap the emoji button to add a Reaction

 

facebook-messenger-reaction-count

Reaction counter

TechCrunch reader Hoan Do sent us a tip that Facebook Messenger is showing some users a Reactions option. When you hover over messages friends have sent in a chat thread, you can tap the emoji button to pick from attaching a little thumbs-up Like, thumbs-down Dislike, or a heart-eyes, lol, wow, sad, or angry emoji. Everyone in the thread will then see that Reaction counted below the specific message you attached it to, and you can tap to see a full list of who left which Reaction.

Facebook confirmed this new feature to TechCrunch, saying “We’re always testing ways to make Messenger more fun and engaging. This is a small test where we enable people to share an emoji that best represents their feelings on a message.” That means not everyone has access now, but if people enjoy it, Messenger Reactions could roll out to all users.

Notably, the Messenger reaction list differs from the News Feed one because of the addition of much-requested and always-denied Dislike button. Though it’s known as Facebook’s most asked for feature, the company didn’t want to inject too much negativity into the feed so it never built one. Instead, it built Reactions so people could share more nuanced emotions quickly, but left disliking for the comments.

Facebook sees it as more a “no” button, the company tells me. It says people often use Messenger for planning and coordination, and it’s experimenting to see if a reactions are helpful for quick logistics and voting. Thats why it’s offering a Yes/No option, even though people will naturally see it as a Dislike button too.

reaction-counter

Messenger Reactions are similar to Slack’s Emoji Reactions. There they’ve proven especially useful in fast-flying group chats, where more messages may have come in before you can respond to one you’re interested in.

Imagine this thread:

Boss – Everyone OK with ordering pizza for lunch?

Coworker 1 – Does anyone want to go to the food trucks instead?

Coworker 2 – I’m going to go for sushi if anyone would rather do that.

You – Yes.

slack-reaction-emoji

Slack offers a similar Emoji Reactions menu and emoji counter on messages

It’s totally ambiguous which message you’re responding to, and it’s annoying to have to say “Yes I want to go to the food trucks instead”. Before Slack finally added threaded conversations, it addressed this problem with Emoji Reactions. A lightweight social chat app like Messenger might not need threaded conversations, though it’s certainly a possibility, but porting over the News Feed Reactions makes perfect sense.

Facebook launched Reactions almost exactly a year ago, and they proven popular, with over 300 billion sent so far. “Love” is the most frequently used, making up more than half of all Reactions. Mexico, Chile, and Suriname see the most Reactions per user. And now, Facebook is weighting Reactions a little more heavily than standard Likes when it’s determining how interesting a post is and how prominently to show it in the News Feed.

Given the success of Emoji Reactions in Slack, the feature could make a strong addition to Work Chat, Facebook’s messaging system for its enterprise collaboration suite Workplace. It could also prove useful for interacting with chatbots, which Facebook also enhanced this week with persistent menus for when you don’t know what command to type.

The more convenient Facebook can make Messenger, the better it can compete with Snapchat, Line, and Google’s fragmented mess of messaging apps. Offering the easiest way to reply could keep users locked into the Facebook ecosystem, even if their social media sharing strays to other apps.

zuck-downvote-sd