Portfolio Update

Since my last update where I purchased shares in ZNGA, it has tragically declined. However, as one of my few speculation plays, I intend on adding to my position if there next earnings report, indicates improvements I can believe as reasonable expectations.

Also, since my last update I purchased shares of YUM, as it finally came down enough to trigger my limit order. Now I only have one more stock to buy that rounds out my dividend strategy. It, however, seems to be resisting the market pressures better than I expected.

In the mean time I have taken advantage of the opening of FB on the option market to buy put options against it. I am extremely disappointed in its extreme over-valuation. I am expecting continued declines into the low 20s, if not further. That is my opinion, you can take it, or leave it. Disclaimer: See bottom of page. http://investorsopinion.blogspot.com

FB - Facebook Inc
YUM -YUM Brands Inc
ZNGA - Zynga Inc

Facebook Not Remotely Worth 38$

On Friday, FB IPO'd at 38$. The thing is that they only earned 43¢ per share last year. That puts their current P/E ratio at over 88. Even if we look at foward looking estimates. They are still over priced to a P/E of about 55.
Now lets look at GOOG. They only have a P/E of about 18. So if we do the math of using FB earnings times GOOG P/E we have a relative price for FB of less than 8$. So far, the market agrees as FB price dropped to 31$ and is struggling to not drop any more.
My opinion? I'm putting it to practice. I've put an order in for under 8$. That is my opinion, you can take it, or leave it. Disclaimer: See bottom of page. http://investorsopinion.blogspot.com
FB - Facebook, Inc.
GOOG - Google Inc
IPO - initial public offering
P/E - price-to-earnings ratio