Tao Economics

You got to love all the talk about the facebook IPO. It gets everyone's attention. It comes up at least once a day in the office that I work. Of all the people that plan on trying their luck with the IPO, how many know the future projected growth of Facebook? How many know how much the company has earned over the last year? What's their ROI, or their Price to Book?

Now don't get me wrong, I'm not saying the IPO won't move higher or lower when it comes to market. I don't know. What I do know is that if you are going to be a contrarian investor then you want to say away from something this noisy and look for bargains elsewhere. Look for areas that nobody is talking about.

For example, the gold mining market has been slaughtered. Gold stocks are trading for the same price as they were in 2009 even though gold is $600 an ounce higher! That cheap, and hated. Go far the large gold producers and hold them for a long time. They are safe, they pay a good dividend and have the know how on acquiring small mining companies. Newmont (NYSE:NEM) for example is very cheap and has been pulling gold out of the ground with a nice healthy gross margin 62%!

What's facebooks profit margin?

Many of the insiders already got in through Goldman Sachs, chances are you weren't one of them. I know Biderman from Trimtabs plans on riding the initial momentum. He also believes the IPO has been dragging down the rest of the stock market for the past week and he makes a really good case for that below.

Discuss the facebook IPO in the message board here: http://taoeconomics.com/ss/viewtopic.php?f=1&t=5014