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Twitter, what’s happening?

November 13, 2013

As you know I wrote 2 books on the psychology of investing. All the shares that I have purchased and sold for the last 10 years have made money (my average CG is 25%, one of the highest in the industry). I say all these things not to toot my own horn but so you will listen to what I have to say about Twitter. The reason I didn’t buy at $26 at IPO is that the organizers of the primary market didn’t let me, I’m not a “big fish.”

Now, you and me have an opportunity to buy close to $26 in a few quarters. Why? Because if you watch TWTR’s earning at the end of the each of the next eight quarters and plot it percentage-wise against the earning at IPO ($300 million) you will have an idea of TWTR growth potential, A) 1.2 billion (3mx4) will be a respectable enough earning to get the share up back to $40, B) I expect something below that billion + 0.2 by 2014, will get the share down close to IPO state, C) TWTR has a great future as SM company. (FB earning is 10 billion in 2013. Investors love social media) but it will take a few years to capture the fringe ad market so the thing is to wait and buy at a strong dip, 4) The rule is: if the dip is close enough to the IPO the first few years  – buy! After 5 years or so your margin of profit shrinks.

I will make money on Twitter buying around $30 but my calculations along the above ideas will have to be a lot more sophisticated about timing than this spontaneous posting. More complex than the above. My job here is to give you a head start on an opportunity to learn to invest with patience. Use your brains for the rest of the journey with the bird. Be patient! Be independent!

I am 77 and retired. My next posting is in December 2013. Be patient, again. Meantime, read all my previous postings on investing rules, to get an idea how easy and hard it is to use Kahneman’s System 2 to make money in the stock market if you are a maverick and have —– patience!

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