My history with Facebook goes back to 2006 when I joined the service, then 2007 when I first visited their HQ in Palo Alto and wrote that I was so impressed with the company that I thought it would be worth over $10bn.  That number that sounded so crazy then is but a fraction of its vaue today.  And then a year later I helped Mark Zuckerberg launch Facebook in Spanish. Here’s a video of the two of us. Needless to say that Mark Zuckerberg is an absolute genius when it gets to build THE social network.

Still I did not buy Facebook shares in the IPO.  I should clarify that I am a long term investor, not a trader but $38 seemed to high a valuation for me.  I was waiting for the shares to come down.

Before the earnings announcement I had bought some Facebook shares at $28 and a few hours ago I bought more shares at $23. And I have another order to buy more if they get to $20.

Here’s my rational.

Image representing Mark Zuckerberg as depicted...

Image via CrunchBase

Facebook is an amazing company, it has a good chunk of the richest segment of humanity glued to its service. The share of global income of people with Facebook accounts must be, in my view, at least half of all global income.  Not only do they have a billion users but they have the billion with the most money.  The top billion.

That Facebook is so great at engagement but so bad at monetization sounds to me as a more solvable problem than the exact opposite and that’s why I am buying the shares.

Right now Facebook seems to get $2 per user per quarter. I can’t believe they are not going to be able to get double that in the near future. If Google owned FB, how much would they get out of its user base? Google gets over $40bn in revenues from its user base now but its users and time on site are comparable to FB. So a good guess could be that FB could get 10X more revenues from their user base when they grow up.

Risks? that they never get good at monetization and/or that somebody else “myspaces” them.  That’s why I only recommend owning at most 3% of your net worth in Facebook shares. My main holdings are Apple, Google and Amazon and my portfolio exposure to Facebook is very small. But now I am a shareholder.

Sun Valley is the only conference that really trains both: your mind and your body. The schedule allows it. There is content in the morning and sports in the afternoon. It is interesting to see that many of the most successful people in the world are also the fittest. While over half of America is overweight or obese I would say that only 20% of Sun Valley attendees are (this is a personal guess).

In my case I confess that I train hard before attending Sun Valley. I am probably not the only one. To me Sun Valley is both a conference and a sports event. During the conference which ended yesterday I was mountain biking 2 to 3 hours a day and did so in the company of amazingly smart and fun cycling buddies.

Allen and Co has found a great formula that trains the mind and body.  To practice sports at conferences makes sense.  And it is not only to be fitter. When you meet people practicing tough sports you bond, and bonding is stronger than networking.

We are in Sagaponack, NY. Nina, Leo and Mia went to see the Southampton 4th of July parade. I am sick in bed with a bad summer flu.  I stayed in bed watching a Game of Thrones marathon. I am on Season 2 Episode 4. I almost never watch TV but I do enjoy TV series.  I watch them mostly during flights off my iPad. And now because I am sick and can’t stop coughing I watch them in bed.  By now, I have probably watched over 10 hours of Game of Thrones over the last 3 days. 

Game of Thrones has a great deal of sex and people talk about that, but sex is nothing compared to the amount of violence it depicts. A violence that it is at the limit of what I can stomach, as when they kill a baby off a woman’s arm. But the story is good and I am hooked. At this point anything that makes me forget my flu is welcome. Still, I suffer as I watch the most violent scenes. When I watch these horrors, I remember the child in myself saying, this is just a movie, this is just a movie.  But then, during a break I read the news. The real news.  And I see this.  A very Game of Thrones real life story going on right now in Syria as Bashar Al Assad tries to stay on his throne and goes on a killing rampage. Reuters reports.

Video clips showed rotting corpses lying in dried pools of blood in dark hallways, their faces covered with flies. One showed a woman and her child prone in a living room. The activist narrating the video said they had been stabbed.

A third video displayed pieces of charred flesh which activists said were severed genitals.

“There was more here yesterday,” said a man wearing plastic gloves.” “But the dogs were taking them.”

So now my defenses stopped working.  I think about what is going on in Syria, a country I visited in 2003 and found it quite attractive.  Here are my pictures of that trip. I can’t imagine how those who appear in them are doing now in this horrible civil war.  Why would Bashar al Assad, a man who trained to be an ophtalmologist in London and his wife Asma al-Assad who was born and raised in the UK and has a degree in computer science go on murder rampages to stay in power?

There is still a lot of Game of Thrones around us. The middle ages are still here.

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