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One of the oldest Wall Street jokes was is from a pre-WWII book by Fred Schwed:

Once in the dear dead days beyond recall, an out-of-town visitor was being shown the wonders of the New York financial district. When the party arrived at the Battery, one of his guides indicated some handsome ships riding at anchor. He said,

“Look, those are the bankers’ and brokers’ yachts.”

“Where are the customers’ yachts?” asked the naïve visitor.

I haven’t looked into this question, but are we absolutely sure that online advertising via Facebook and Google really works as well as markets assume?

My rule of thumb is that the stock market knows a lot more than I do about the valuation of stocks, so I’m not all that contrarian. My basic shtick is to not be oblivious to the obvious. If the stock market says Facebook’s capitalization $414 billion, well, the amount of hard thinking that has gone into that number is a lot more than I could reproduce, so I take it for what it’s worth: the single best skin-in-the-game estimate of Facebook’s market cap.

On the other hand, even if proof that online advertising is currently as effective as the huge market caps of big online firms seem to assume, the stock market could believe that even if this hasn’t gone through the formality of taking place, it’s only a matter of time. There’s just too much money at stake to fail. A famous knockoff of Allen Ginsberg’s “Howl” by a Facebook employee laments: “The best minds of my generation are thinking about how to make people click ads.” So it might be rational to assume it’s bound to happen.

 
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  1. Isn’t the nature of the market though that it’s relatively safe to be wrong in the way that everybody else is, but really, really unsafe to be wrong but in a way that nobody else is? All of the personal and career danger isn’t in being wrong so much as being alone while being wrong. I think this incentivizes herd behavior, where you’d much rather slowly die with the rest of the herd from some communicable illness than getting picked off by the lions even if the end result is the same.

  2. “The best minds of my generation are thinking about how to make people click ads.”

    I remember a story recounted by Wernher von Braun about receiving a letter from a newly minted techie from Europe about what he should do with his life.

    von Braun said: “Come to America; we are going to the Moon!”

    How we have fallen in our national aspirations.

  3. TheBoom says:

    As with the Gold Rush, there is easier money and less risk selling to the miners than being a miner or stock investor or Facebook advertiser.

  4. indocon says:

    I have seen first hand digital advertisement go from few thousand $ to several millions $ for several of my clients (mix of retail and product companies) over just last few years, mirroring the rise of these companies market cap. What I find amazing is that these same companies have VP+ level positions dedicated to managing similar size budgets in other areas like supply chain, real estate, energy etc with specific responsibility to standardize and squeeze every last penny out of them, no such role exists in digital marketing. Often times its a analyst or manager level position responsible for making specific decisions like how much to bid for what on these platforms, their metrics for success tend to be driven of overall company revenue and not to anything that is specific to their actions.

    I think the answer to that famous question from a P&G marketing exec about not knowing which half of his advertisement budget is wasted is digital advertisement. One of my clients actually did a control exercise to find most effective medium, which turned out to be direct mail. Because this was not the answer she was looking for, she did noting with that study.

  5. Perhaps the “tech” label that supposedly justifies the high P/E multiple of these companies may be a bit overrated.

    For example, Amazon may be a dominant, well-run company. But it’s still basically a big mail order company with an online catalog.

    Facebook and Google likewise seem to have a very small group of elite coder nerds that keep their core monopolies running. But the rest of their operation is a glorified yellow pages.

    I guess I am skeptical that they and their workers are really entitled to all the gushing praise about being such creative and special “knowledge workers.”

    When they aren’t virtue signalling on internal message boards they probably spend their time filling out TPS reports like any Dilbert-esque cubical worker from the 90s.

    • Agree: Almost Missouri
  6. TheBoom says:

    “I’m just like everybody else. I want to be a non-conformist too.” Lenny Bruce

    If marketers want to have a good career they have to follow the herd while pretending to be unique. If the “gurus” are saying to advertise on Facebook and other high profile marketing people are following that advice, you better do so too. If you don’t hop on the bandwagon du jour, you will be seen as out of date. This is especially the case if you are over 35.

    Eventually, new trends always develop and marketers can ditch Facebook if it isn’t performing after they have jumped on the new “revolutionary” trend.

  7. @indocon

    I worked for the most scientific television advertising assessment laboratory ever way back in the mid-1980s. Only rarely did doubling TV advertising for existing supermarket products increase sales to any measurable extent. I managed one 3-cell test for a famous brand that tried increasing advertising, keeping advertising the same, or cutting advertising. None made any difference in sales over a couple of years. I suggested doing more tests of cutting advertising to see if the brands could save money, but the client wasn’t interested: “We believe in advertising” was their view.

    They had good reason to believe in advertising. This was a company that had been extremely successful over several generations.

  8. Grumpy says:

    Who audits Google, Facebook, etc?

    Who is even capable of verifying the reported number of “clicks” an online ad receives?

    • Replies: @Redneck farmer
  9. Enochian says:

    Been using the internet for 23 years. In that time, I’ve never clicked on or read a single ad except by accident. If google has such a good marketing profile on me, why don’t they block me from ad supported sites?

  10. anon[190] • Disclaimer says:
    @Steve Sailer

    I suggested doing more tests of cutting advertising to see if the brands could save money, but the client wasn’t interested: “We believe in advertising” was their view.

    When you say “the client”, do you specifically mean someone whose salary, prestige and office-square-footage was directly related to the size of the company’s marketing budget?

    They had good reason to believe in advertising. This was a company that had been extremely successful over several generations.

    Who’s to say they wouldn’t have been more successful with less advertising?

    • Replies: @Steve Sailer
  11. anon[190] • Disclaimer says:

    On the other hand, even if proof that online advertising is currently as effective as the huge market caps of big online firms seem to assume, the stock market could believe that even if this hasn’t gone through the formality of taking place, it’s only a matter of time. There’s just too much money at stake to fail.

    If it doesn’t work, does Zuckerberg have to give the money back?

  12. Anon[234] • Disclaimer says:

    Browsers now have as blocking software pre-installed and enabled, and 70 percent or more of web use is mobile, on smaller screens where it’s hard to integrate ads. Clickthrough rates are near zero. Sites resort to deceptive ads that look like article links. Some advertisers have moved to podcast ads. To buy ads these days on Google you almost have to go through a consultant who knows all of Google’s esoteric features and rules and analytics. Add all of this to the fact that many businesses are sharecroppers on someone else’s platform, and could lose it all in a day, and the internet makes me think farming is where it’s at.

  13. anon[355] • Disclaimer says:

    …I take it for what it is worth”…

    Ever hear of Nortel Mr. Sailer? At its peak it was worth over 300 billion Canadian dollars (about 225 billion $US). It comprised 35% of the entire Toronto stock exchange and had over 90,000 employees.

    It was delisted in 2009 and was worthless. Its workers lost their jobs, shares, severance and pensions.

    The market is often dead wrong on what a company is really worth.

  14. Just as we didn’t really know how newspaper and TV ads worked, or if they did, we have no idea if Google ads work. I think it charges for millions of fake clicks.

  15. ZeroDay says:

    Back in the summer, Twitter removed 6% of their accounts for being fake. This knocked 20% off their share price. What what it do if they were honest and removed the 30-40% of accounts that are fake? But at a certain point, it becomes a self-fulfilling prophecy.

    Combine the social proof for advertisers, diminishing marketing alternatives, winner take all aspect of tech, and a Silicon Valley cartel. What are the other options? It wouldn’t shock me if the biggest advertisers are better off, since they can now tap smaller demographics and regional markets.

    But from a societal perspective, even if one tech company is displaced by another via creative destruction, the same cycle repeats, where the most extreme voices in our society can increasingly dictate the conversation. Without a doubt there is a media echo chamber and liberal tech censorship enables this. But it starts with the fake users, where a group of a dozen highly motivated people can masquerade as 10000 average people. It’s inherently undemocratic, and with increasingly sophisticated AI, it will be co-opted and destructive to our society. More so, in a multi-ethnic society.

  16. There are an awful lot of dollars out there looking for places to go, so $414 billion might not really be worth 414 billion dollars anymore. But shhh!, don’t tell anyone unless you want to wind up paying $50 for a loaf of bread.

    The only real valuation of a stock is what you get when you sell it. None of the metrics or analyses matter other than that, except in the sense that they convince investors to buy or hold. In that sense, they too are advertisements.

    In other words, hell yes, Facebook is overvalued.

    • Agree: Almost Missouri
    • Replies: @Lagertha
  17. Lurker says:

    I thought one of the arguments for advertising, whatever the medium, was as a barrier to entry. You might make indifferent widgets but spend $X million a year advertising them. Someone else might invent a widget that is better and cheaper than yours in every possible way but they will also have to find close to $X million just to take you on.

  18. Dave Pinsen says: • Website

    Facebook is currently being sued by advertisers who say the company lied about how much time viewers spent watching its video ads. I wrote about that last month (“Facebook should be shattered and the earth salted in its wake“).

  19. O'Really says:

    Everybody talks about these incredible algorithms that predict what you want before you even know you want it.

    Then why is it that every online ad I see is for something that I recently purchased, and have no intention of buying again, at least for quite a while (a floor lamp, a laptop, etc.).

    I don’t think I have ever intentionally clicked on an online ad, and I certainly have never purchased anything based on one.

  20. Lagertha says:

    Owning a big yacht is so over; boats are very, very costly. I saw the last gasp in Europe 7 years ago as far as the Mega-Yachts of the Titans (saw Russian oligarch come in with boat, laden with helicopters/Zodiacs/waverunners/chicks. Stuff costs a lot more now; thanks to the refugees in Europe that have to be fed…and the politicians who don’t know whether to embrace the oligarchs or shun them. I do feel that we are running out of Oligarchs! Oh my!

    Now, a sign of bigness is to rent a yacht & crew and get on Below Deck!
    http://www.bravotv.com/below-deck

  21. @indocon

    What I find amazing is that these same companies have VP+ level positions dedicated to managing similar size budgets in other areas like supply chain, real estate, energy etc with specific responsibility to standardize and squeeze every last penny out of them, no such role exists in digital marketing. Often times its a analyst or manager level position responsible for making specific decisions like how much to bid for what on these platforms, their metrics for success tend to be driven of overall company revenue and not to anything that is specific to their actions.

    There is a reason why companies do not invest in squeezing every last penny out of digital advertising. Have you ever tried to negotiate digital advertising buys with Google or Facebook? You don’t. You take what they offer you. They are both virtual monopolies that control massive swaths of the digital advertising marketplace. You basically take their terms or you engage in targeted marketing where you quickly incur expenses.

    The same digital advertising marketplace is doubly unfair to the content providers. There is a reason why so many newspapers and magazines have downsized over the last two decades. I think mandatory government imposed royalty structures (think like the music industry) might be the answer so that more of the ad spend is required to go to the content creator as opposed to the monopolistic platforms.

    In general, the advertising business is incredibly opaque and unfair to advertisers. No comment on what advertising does to the consumer. The big advertising agencies engage in self dealing and undisclosed mark-ups that would be criminal in any other businesses. Television ad buys are largely done through extremely opaque b2b intermediaries that operate in a netherworld where price discovery is a fantasy. Good luck trying to find competition in the billboard market as it is also heavily consolidated.

    The advertising world is kind of rigged all around.

  22. Lagertha says:
    @Buzz Mohawk

    Facebook was a great idea…but..then the Watchers arrived….

    https://youtu.be/dMrimMedYRo

  23. Lagertha says:

    I so hate how they are watching us!

  24. Mike says: • Website

    I ran my own little kitchen design and remodeling company and tried Google AdWords. It was a complete waste of money. The little neighborhood magazine that gets distributed for free that all the RE agents advertised in was a much better use of my limited advertising budget.

    I was fairly convinced that my local competitors would get online the first of each month to see if they could click away my advertising budget for the month.

    I don’t directly own any Google or Facebook stock. I do think they are both overvalued, but I won’t do anything about it. I watched a guy short Dell during the mid 90′s. He would have been rich if he could’ve held on until the NASDAQ meltdown. He went broke about a year beforehand.

    • Replies: @Anonymous
  25. @Dave Pinsen

    “Facebook should be shattered and the earth salted in its wake“.

    Chris Conroy seems to be paraphrasing JFK’s infamous assessment of the CIA: “Splinter the C.I.A. in a thousand pieces and scatter it to the winds.”

    Conroy better be careful, we all know how that worked out for JFK.

    Facebook is in many ways just doing what it can get away with. It is an unregulated monopoly so there will be abuse. The federal government has to intervene and require honest performance disclosure to its ad buyers, protection and transparency for consumers with respect to their privacy and a transparent pricing mechanism.

    All of which is possible with the right political Will.

    • Replies: @Dave Pinsen
  26. J.Ross says: • Website

    I don’t have the links or screencaps to hand but it was proven during the Trump campaign that big tech lies gruesomely about advertising effectiveness, which is not to say that it’s pointless, but they engage aggressively in several different activities to make it look better than it is. It came out at the same time that the subscribers of collapsing dinosaur media being exposed as residents of countries where they are not legally allowed to receive those media products (as in MMORPGs, Chinese gold farmers, only now they’re farming paper). This was briefly a mainstream story with resulting dips in stock but it was quickly “resolved” (which either means it wasn’t resolved, but was better covered up, or that they changed their in-house accounting).
    There are several activities which emerged from or exploit this information. Flash and java blockers can be added to most web browsers to prevent most advertising from being visible. Replace the word you with the word hook for the YouTube url of the video you want to watch: this circumvents YouTube “just one more we promise” commercials.

    • Replies: @ic1000
  27. I saw the best minds of my generation destroyed by 80mg of Adderall and five hour edging sessions.

    -some guy on twitter

  28. Dave Pinsen says: • Website
    @Clifford Brown

    The New York Times just dropped a ton of bricks on Facebook.

    • Replies: @Lagertha
    , @Clifford Brown
  29. Lagertha says:

    I hate all the men & women (the billionaire/perhaps, still millionaire) there, in SV- they don’t care about humanity or the environment for fucks sakes; they don’t care about GCC. They only care about themselves – always have once they got rich. But, they hid that from their employees and the minimum wage workers in Calif; including their housekeepers, nannies, dog walkers for fuck’s sake. I love this news! I want those people to suffer. They are trash when they thought migrants and Deplorables were trash. I want them to suffer.

  30. J.Ross says:

    This isn’t what I was looking for but is a weak end of the same pattern: Google, in asking for greater advertising spending for YouTube, made pretty wild claims, and an ad think tank rubbished them without rejectingonline advertising altogether:

    In October, Eileen Naughton, Google’s UK and Ireland chief, told advertisers last October they should be spending a quarter of their TV ad budget on YouTube instead if they wanted to reach 16- to 24-year-olds. Thinkbox spent months compiling its own research data and launched a counterattack, claiming YouTube only really accounts for 10.3% of time spent by 16- to 24-year-olds consuming video.

    The research also claimed YouTube accounts for just 1.4% of the time that demographic spends actually viewing video advertising.

    https://www.theguardian.com/media/2016/apr/20/google-youtube-ads-tv

  31. Lagertha says:
    @Dave Pinsen

    hurrah – there is righteousness in the world. Good conquers Evil.

  32. utu says:

    There are companies and businesses that do not need to advertise in the MSM. Would something bad happen to them if they stoped funneling money to the MSM? The MSM are too important for the whole system to be left underfunded.

    Would something bad happen to Microsoft if Bill Gates did not start to “share his wealth” by launching Bill & Melinda Gates Foundation? There were hints and talk of the antitrust action in late 1990s but he seemed to be dragging his feet.

  33. J.Ross says: • Website
    @Dave Pinsen

    Lying about time spent seeing ads (let alone whether the ads even reach the consumer thanks to blockers and downloading) seems to be the main thing. I’ve never sat and watched YouTube like a TV, I download and watch later. I expect that this is more common than is widely known. My exposure to YouTube ads is near zero. On a TV, you had to sit through commercials, especially before cable. Computers are inherently more consumer-controller and it would shock me if I ever saw (as I never have) somebody patiently sitting there, listening to a message about car insurance, to get to his video. It would not shock me at all to learn that there are no people at all being successfully reached in this way.

    • Replies: @Anonymous
    , @jimmyriddle
  34. @Dave Pinsen

    The New York Times is focusing on how Facebook permitted the alleged Russian interference in the 2016 election. I think the Russian social media campaign is completely overblown.

    My fear is that The Powers That Be are more than willing to continue to tolerate Facebook’s monopoly position and the numerous and real abuses that arise from Facebook’s monopoly provided that Facebook censors criticism of the Political Establishment so that a populist movement can never arise again.

    • Agree: ic1000
    • Replies: @Dave Pinsen
  35. J.Ross says: • Website

    Here’s something: Carlos Slim may have used Chinese business partners to help out apparent paper strength. All the major flagships had suspicious (and huge) upticks in Chinese attention around the same time. Internet ratings measurer Alexa responded to this information by no longer keeping track of where clicks originated country-wise.

    https://www.zerohedge.com/news/2017-02-09/fake-newsflow-are-ny-times-guardian-and-wapo-buying-clicks-china-jumps-trickle-half-

  36. Dave Pinsen says: • Website
    @Clifford Brown

    I agree the Russia business is overblown, but I think that was just a pretext to go after Facebook and Sandberg. Of the FAANGs, Facebook is the most vulnerable. Its core platform has been declining for a while, and with Clinton losing in 2016, knives have come out for some in the Clinton orbit, like Sandberg. There’s also some resentment about Facebook’s impact print journalism, as Conroy expressed.

    • Replies: @Clifford Brown
  37. C’mon Steve, you know better than to phrase the question this way. Online advertising is not only not particularly effective, an awful lot of it is pure fraud; some of it is even other manner of shady business, like money laundering.

    Doesn’t matter: agencies and advertisers buy from Google and FB. That’s why the stock market values them that way. Where else they gonna go? NBC?

    I mean, saying FB and Google are worth something because their advertising has utility to the advertisers is a lot like saying Herbalife is super profitable for its “affiliates.” Bill Ackman is probably right about them being jerks and mountebanks, but, like the stock market is right: Herbalife, Google and FB make plenty of money.

    • Replies: @Lagertha
  38. Daniel H says:
    @Steve Sailer

    >>“We believe in advertising” was their view.

    I live out in Las Vegas, and we have several Sees Candies retail stores out here. Never, while I have lived here or when I lived in New York previously, have I seen a Sees Candies advertisement. Never, not once. I wonder if anybody else has ever seen a Sees advertisement.

    Yet, this company prints money, as they say. Has returned several $billion in cold hard cash to Berkshire’s bottom line in the 50 or so years that it has owned it. A true jewel in the crown of Warren Buffet’s empire. Buffet claims that for 1/4 of the year the company can run on fumes, accounts payable. A magnificent enterprise.

    I suspect that once a company is up and running with solid product, 90% of advertising is bogus. For technical products I can see marketing’s value in delivering important product information regarding new and established products, beyond that, a waste of money.

    And Sees candies are even better than you may have heard. A true American delicacy.

  39. jim jones says:

    The Gubmint should make adblockers illegal and then we would really see the Economy boom.

  40. Enochian says:
    @Steve Sailer

    It would be ironic if one of the 20th century’s biggest (I will not say greatest) cultural achievements only existed because companies erroneously believed advertising was effective.

    • Replies: @Realist
  41. nsa says:
    @Alec Leamas

    “Contrarian” investors only make money at trend changes, possibly 10 to 15% of the time, and usually end up in a trailer somewhere eating ramen and drinking ice house. Most successful investing systems involve some form of trend (herd) following i.e. discerning a trend early, following it, getting out before the trend changes. This is summarized in various investing cliches: “the trend is your friend”…..”made my fortune selling early”…..”market can stay irrational longer than you can stay solvent”…….”catching a falling knife”……etc.

    • Replies: @Inquiring Mind
  42. Lagertha says:
    @Scott Locklin

    duh. We are at a precipice, bc the Bad People put this on you. Free Communication is sooooo desperate right now, so, so go to free. Fight, be strong, Grow up! Free yourselves from the ones who want you to conform.

  43. @indocon

    One of my clients actually did a control exercise to find most effective medium, which turned out to be direct mail.

    Paging Morris Dees!

    DMA Names 4 to Hall of Fame

    A Demagogic Bully: The Southern Poverty Law Center demonizes respectable political opponents as “hate groups”—and keeps its coffers bulging.

  44. @Daniel H

    The one advertising test I worked on where more advertising clearly beat less advertising was for a new version of a famous old consumer packaged goods brand that had a new chemical innovation of merit.

  45. “Look, those are the bankers’ and brokers’ yachts.”

    “Where are the customers’ yachts?” asked the naïve visitor.

    Good one! My own favorite is from Ogden Nash:

    Bankers dwell in marble halls
    Which they get to dwell in
    By encouraging deposits
    And discouraging withdrawals.

  46. I haven’t looked into this question, but are we absolutely sure that online advertising via Facebook and Google really works as well as markets assume?

    The Democrats seem pretty sure that Russia spending $100,000 on Facebook ads about puppies got Trump elected. Sounds like a good investment to me! (Oh wait – Trump is sanctioning Russia. Maybe not …)

  47. Tyrion 2 says:

    I

    haven’t looked into this question, but are we absolutely sure that online advertising via Facebook and Google really works as well as markets assume?

    Google ads work. It is also easy enough, if you’re competent, to know if they work.

    You see what the customer typed in before they clicked your link. The link takes them to a specific landing page with Google.com as the referer, so you can follow them all the way to the purchase and not only quantify the process but slowly improve it.

    In the other hand, your analogy holds.

    Ad Words has a tendency to take a lot of the marginal profit. Advertisers are “yeoman farmers” in perfect competition. Google is not. This is easiest to see at the extremes. Car insurers in the US pay on average $70 per click through to their website! Meanwhile, online poker in the UK, I’ve been told, can reach £300 per click.

    This means I can take £300 from an online poker company now and give it to Google with my phone, for fun, with just a click.

    Advertisers wouldn’t do this if there wasn’t a reward but the perfect competition between them may have trapped them in this relationship, with all of their surplus value sucked up by the monopoly Google.

    This is very bad for our economies so I try not to use Google. The problem is that Google search really is very noticeably superior.

    • Replies: @anon
    , @Scott Locklin
  48. Tyrion 2 says:
    @Hypnotoad666

    I walked past Google’s London HQ yesterday. Looking through the windows, it’s a lot nicer than Dilbert’s office. Before they launched, they called it a “horizontal skyscraper”. Which is easy to picture even if it an annoying oxymoron. But you’re right, the core product is ridiculously profitable and the rest is endless cotton candy for the workers in the hope that something as good as the core product might just emerge.

  49. @anon

    The market is often dead wrong on what a company is really worth.

    Sure, but I, personally, would be deader wrong.

  50. @anon

    When you say “the client”, do you specifically mean someone whose salary, prestige and office-square-footage was directly related to the size of the company’s marketing budget?

    Brand managers all wanted to spend more on advertising. Traditionally, nobody got promoted for cutting their ad spending to save the company money.

    But this was a third of a century ago and I don’t know what has happened there since.

  51. Where are the advertisers yachts? These would be the boats fewer of which you see being towed on the nation’s highways.

  52. @TheBoom

    Louis L’amour had an ongoing crack in his novels about the character knowing someone who made a fortune in a gold rush, “he sold supplies to the miners”.

    • Replies: @anonymous
  53. If Russians were able to elect Trump and create discord among americans with $100k worth of Facebook ads, those ads must be extremely efficient.

  54. @Grumpy

    It was nice knowing you online, Grumpy. We’ll miss you.

    • Replies: @Inquiring Mind
  55. @Hypnotoad666

    Google is the exception to the nothing-burger of Facebook and the retailer Amazon in these specific regards: mapping, StreetView, Google Earth, Google Hangouts (free US phonecalls), Picasa (image management and post-processing), free email, and their customizable search engine. If you have a counter on a webpage, you can see the visits of the assiduous Google spydering bot.

  56. @TheBoom

    Agree. That strategy worked well for Levi Strauss.

  57. @Daniel H

    See’s candies are the best candies on earth. They beat Godiva and the fancy Euro brands hands down. They do mail out a brief catalogue before Christmas.

  58. Anonymous[332] • Disclaimer says:

    I thought it was widely accepted that large 21st century profits are mostly supply-side infusions from investors. Probably not true for Amazon, Netflix and a few others. But haven’t the newspapers been on the precipice of going tits up for twenty years now? Yet they soldier on, where does the money come from?

    My belief is that there is a hidden cache of hoarded currency, held by a handful of trillionaires. Easily over 100 trillion dollars. Most of the new parts of the economy are working to get at that stash of money, not customers’ money. Starting up some b.s. NGO and finding it a sugar daddy are a Millennial specialty. Many new business are just NGOs without the fancy paperwork, and what customers it has are the product, not the main source of income.

    Facebook is sold as a tool for setting the parameters of debate and defining what is acceptable. It’s rabble control. Ultra wealthy like that a lot, so they invest a lot. Voting with dollars. Online ads have never been effective and Facebook is no different.

    • Agree: BB753
  59. Anonymous[255] • Disclaimer says:
    @Mike

    my local competitors would get online the first of each month to see if they could click away my advertising budget for the month.

    What does this mean?

    • Replies: @Mike
  60. Anonymous[255] • Disclaimer says:
    @J.Ross

    I’ve never sat and watched YouTube like a TV, I download and watch later.

    How does one download YouTube video. Is that really possible?

    • Replies: @Jim Don Bob
    , @Romanian
  61. @J.Ross

    I see very few ads on YT and 90% of them are for either Grammarly or Wix.

    I never bother logging in to YT, and zap cookies between browser sessions. Perhaps, that is why.

  62. @Steve Sailer

    I think it’s plausible that advertising boosts a brand’s value in a way that isn’t measurable over a couple of years.

    Brands like Coke, Pepsi etc are able to command vast premiums above near identical unbranded equivalents.

    That reflects the effect of decades of advertising.

    • Replies: @Steve Sailer
  63. Realist says:
    @Enochian

    I have always found it hard to believe that extensive advertising of a product generates enough additional revenue to justify it. Think about a product that has extensive advertisement on TV, such as My Pillow or the F-150 pickup. Do these advertisement generate enough additional revenue to justify them?

    • Replies: @Yngvar
  64. anon[190] • Disclaimer says:
    @Tyrion 2

    The problem is that Google search really is very noticeably superior.

    Getting worse all the time, though.

    Have you noticed that they’ve started giving you results with one of your search terms excluded? You search arse giblets and it gives you the results just for arse. You have to click on a thing that says “must include giblets”, and it searches again, this time with giblets in quotation marks. Why would I have typed it if I didn’t want to search for it?

    • Replies: @Tyrion 2
    , @Almost Missouri
  65. Tyrion 2 says:
    @anon

    That function seems very well designed for mobile, which is what Google does exceptionally well. It is so much better at fixing mistypes from little screens and making the whole process more straightforward. When it excludes the term it often seems to be because it guesses that you fat-fingered it, but so badly that it cannot autocorrect. For me, with a dainty little mobile, that is usually right. Google’s autocorrect is also effortlessly superior.

    I have been trying for ages to use other services, but if I really want some info I type in google.com.

    I suppose this is the result of their network effect. They have the biggest network so they learn the most so they do the best so they have the biggest network.

    • Replies: @anon
  66. @jimmyriddle

    That was Warren Buffett’s view of Coke.

    I can recall about 1988 driving by the Tootsie Roll factory in Chicago and thinking that I should get rich by doing a Mike Milken-style leveraged buyout of this famous brand.

  67. ic1000 says:
    @J.Ross

    > big tech lies gruesomely about advertising effectiveness

    That’s one of the amusing traps of the Mainstream Media narrative that Russia Stole The Election. They executed this awesomely audacious heist by spending (cue Dr. Evil) hundreds of thousands of dollars on social media ad buys.

    So the effectiveness of those billions lavished on political and commercial advertising campaigns must be look a squirrel.

  68. SBrin says:

    Five or six years ago I put pencil to paper and compared Google’s annual revenue to a rough estimate of US advertising budgets and global advertising budgets for all industry. The numbers quickly implied that Google revenue represented over 100% of the US advertising budget and 50% of the global advertising budget. Based on those numbers I concluded that a significant portion of Google’s revenue is fictitious and likely comes from black-box budgets in the CIA, NSA, DoD, etc.

    I still believe this to be the case for Google and FaceBook. Advertising budgets in large companies are grossly excessive and horribly supervised, but they are still finite. There simply aren’t enough advertising dollars available in the global economy to support the revenue stream growth reported by Google and Facebook.

    Based on this calculation I chose not to invest in either Google or Facebook. Big mistake. Sometimes it’s better to shut off the brain and follow the herd.

  69. are we absolutely sure that online advertising via Facebook and Google really works

    Apparently Eric Schmidt also had his doubts, and he openly admits that initially, he was terrified that people would discover “our ads were not worth anything”:

    COWEN: So you receive an offer to run Google. Why were you so skeptical about Google at first?

    SCHMIDT: Well, I assumed that search wasn’t very important, and I assumed the ads didn’t work. I was so concerned about the ads that, after I accepted the offer — because it just seemed like it was interesting, and a lot of luck comes from doing things that are interesting, and sort of creating your own luck — I hauled the then–sales executive, whose name was Tim Armstrong, who you all know well, and I said, “Tim, prove to me that these ads work.”

    So they showed me a set of ads, and they looked pretty foolish to me. So I said, “Well, let’s go find the finance person,” of which there was one, and the accounting system was done on QuickBooks. I said, “Prove to me that people are paying for these ads,” and they did.

    We then did an ads conversion in the first year, which was called Project Drano, where we basically took three different ads databases, which were simple compared to today’s databases, and merged them into one. And I was terrified, absolutely terrified that the ruse that we had — because we had fixed pricing on our ads — that people would discover that our ads were not worth anything.

    https://marginalrevolution.com/marginalrevolution/2018/11/conversation-eric-schmidt.html

  70. Bitfu says:
    @anon

    It’s a trader’s market, not an investor’s market. As such, the stock market is not really a prediction of what a company is really worth. Rather, the market now functions as a a prediction of what participants predict of a company’s worth. That’s why the market cap can vanish so quickly.

  71. @Alec Leamas

    Tracking error is deadly for any investment manager. They get one to three years of underperformance – usually measured against the S&P which these days is dominated by the FANGs – before getting the axe. Best not to stray too far.

    While the music plays, you dance.

  72. @nsa

    The difference is that iSteve has considerable expert knowledge about advertising.

    In a previous life, our esteemed blog host was in a small firm studying the effectiveness of advertising, which figured out that planning an ad campaign, i.e. marketing, is pretty much just “throwing darts.” The firm went out of business because they essentially told their customers, “Don’t pay us money, because Science shows that it would not do you any good”, iSteve took ill for which he thankfully recovered and we all wish him that he stays well, and now he entertains us loyal readers by applying his skills for Noticing (TM) from the time a generation ago before all the other similarly skilled Jedi got wiped out.

    I follow what you are saying, nsa-bro, because even if you know something that a whole lot of other people don’t, advertising is a scam, the electric car is a fraud, climate change is a crock, yes, you are going to end up in a van-down-by-the-river eating ramen cooked on an alcohol stove right before drinking the remaining alcohol.

    But this doesn’t mean you cannot make some money with a contrary point-of-view. The Tesla (TSLA) Web page on the Seeking Alpha crowd-source investment-advice site is almost as entertaining as iSteve on unz.com. It is a “dumpster camp fire” (a term I made up where people sit around a dumpster fire to occupy the time when they are supposed to be writing a report at work and have writer’s block, and everyone there trolls everyone else by tossing more trash into the fire).

    A site that garners that much traffic along with repeat views must have value (drum roll please while I wait to deliver the punch line) for advertising?

  73. @Steve Sailer

    Leave it to Steve to distill the whole idea of index investing into one pithy sentence. Well done, sir.

    It’s like the story about two campers outrunning the bear (see how I threw in the word “bear”). The market doesn’t have to be faster than the bear, just faster than you – and, frankly, as a group, we’re not very fast.

    Also, any professional investor attempting to outperform the market runs into some very difficult practical challenges, even if they have the incredibly rare talent to actually beat the market:

    1. Costs
    – A manager must charge a fee, let’s say 2%. Now the manager has to not just beat the market, but beat the market by more than 2% a year, or, heaven forbid, 2 and 20. Their job just got much, much harder

    2. Rising assets to manage
    – As manager has success, he will start to accumulate more money to manage. This makes his job much harder. It’s one thing to outperform the market with $50 million in assets – allowing you to go after microcap stocks and special situations – it’s quite another trying to outperform the market with $500 million or $2 billion. At some point, you’re forced to spread out the money so much that you start to mirror the market, which, of course means average returns. Look up the Active Share of many “active” mutual funds and you’ll find that they’re marginally different from the S&P.

    3. Changing economic environments
    – Managers who thrive in one economic environment – say the inflation of the 1970s – often find it difficult to thrive in different environments.

    It’s just tough to outperform the market over the long run, and even tougher for your average Joe to figure who can do it. Better to stick with index funds and move on with your life knowing that you’re doing better than 80% to 90% of the pros over time. (It’s crazy when you think about it. Imagine someone offered you the ability to be as good as the average PGA tour player. You’d take that deal in a heartbeat. Well, it’s the same with index investing.)

    However, if anyone out there is dead set on trying to outperform the market, I’d suggest using an asset momentum system that combines absolute and relative momentum, such as Gary Antonacci’s Dual Momentum. This is a great strategy, but it only works if you stick with it, and most people won’t, so still best to use index funds.

    • Replies: @Hypnotoad666
    , @MarkinLA
  74. Moses says:

    I advertise a lot on Google and Facebook .The ads work. They work great.

    The targeting is incredible. You can target narrow slices of demographics and geographies. Amazing.

    Everything is trackable. If anyone is “wasting” untracked dollars online then they don’t know what they’re doing.

  75. J1234 says:
    @Hypnotoad666

    Remember when everyone talked about how Amazon was always losing money (or never making it)?

    https://www.investopedia.com/stock-analysis/031414/amazon-never-makes-money-no-one-cares-amzn-aapl-wag-azo.aspx

    In some ways, they still are (or aren’t.)

    https://www.thestreet.com/opinion/amazon-is-losing-money-from-retail-operations-14571703

    They’re apparently countering retail losses with advertising dollars and other sources. So someone’s making money from online advertising. But are it’s ads effective?

    I can’t think of one instance where a random online ad caught me, with the exception of movie trailers that showed promise. Can I be the only one?

    • Replies: @Hypnotoad666
  76. theMann says:

    Got rid of Cable years ago. And am dumping Sling, both for the same reason – won’t put up with the commercials.

    Run adblocker plus and other software to block ads online. And print is dead, so basically have a zero tolerance policy for ads. In general, if advertising is working, it isn’t for me.

    Even so, I understand the most interesting man in the world quintupled Dos XX sales in the USA.

    • Replies: @MarkinLA
  77. L Woods says:
    @Alec Leamas

    That aptly describes life in general.

  78. The Z Blog says: • Website
    @indocon

    When I was starting out, I worked in a corporate finance department doing entry level work. One of my assignments was to pull together the spend on all marketing programs by market and then come up with a way to calculate an ROI. Getting the spend right was not as easy as it sounds, as things like loyalty programs hide the cost of the effort in discounts and the price of the product or service.

    After a few weeks working on it, my conclusion was that there was no way anyone could possibly know if any of these programs were working. The data was simply not available, unless someone like me was scouring the expense lines and actually looking through accounts payable to cobble it together. Since I was the only guy doing it, it meant no one had the data, so I decided to ask the director of marketing about it.

    Here’s what he told me.

    “Every year I exceed my marketing budget by three to five percent. In good years, I point out that the additional marketing efforts drove sales. In bad years, I point out that the restraints of the marketing budget made it difficult to mitigate the downturn. Every year I ask for a ten percent increase in the marketing budget and I usually get what I spent the last year.”

    It’s a story I like telling, because I’ve seen it repeated many times over the last 25 years of working. I don’t doubt that he was to a great degree shining me on. I was a kid and he probably was amused by me asking about marketing ROI. Still, I’ve never seen an analysis of marketing efforts that was based in quantifiable reality. Most is just comfortable assumptions cloaked in corporate gibberish.

    My sense is, like with Steve’s faith in the market cap of FaceBook, people see everyone else doing it, so they assume it must work. After all, look at the smart people spending billions to advertise. As to FaceBook specifically, a fair amount of what countries with laws would categorize as fraud, plays a big part of it too.

  79. @anon

    I don’t know if Google is getting worse so much as the competitors are getting better. As Tyrion 2 suggests, though, Google is still the sleekest and most aesthetic.

    I have noticed Google search becoming more censorious in the last couple of years. Formerly, I often discovered things via Google searches that I was sure Google would not approve of. Now that doesn’t happen much anymore. They have pre-selected (i.e., prejudiced) certain news outlets (all lefty of course) to be the go-to ones for any given news item you search. Some wrong-thinkers are simply blacked out of Google search results. There are also more subtle shifts of search results away from incendiary topics to more establishment approved results. Trying the same searches on less politically correct competitors (e.g., Startpage) I can often find the target more quickly, or at all.

  80. So it might be rational to assume it’s bound to happen.

    You can make an ass out of yourself all you want. Leave me out of it.

    Advertising enhances sales as much as a peacock’s feathers enhance his aerodynamics.

  81. @Steve Sailer

    Unlikely.

    Was Pete Lynch ever disproven?

  82. Mike says: • Website
    @Anonymous

    What does this mean?

    I’m a little reluctant to show how little I know, but I’ll give it a go.

    See Tyrion at #41 for an excellent explanation. I wish I had read this before spending the money on AdWords.

    When using adwords you can set limits. For everything if I remember correctly. You can set a limit for how much you are willing to bid for a certain search term. Daily limits on what you spend. Monthly limits on what you spend too.

    My adwords budget would get spent each month in the first few days. With no measurable increase in phone calls, e-mails or showroom visits during these periods. Nor the weekend following these expenditures.

    So like Tyrion taking £300 from a poker parlor and giving it to Google, I thought my competitors were taking my money and giving it to Google. Just because they could.

  83. I can’t speak to Facebook. My market is B2B.

    But I do use Google (and Bing). Note that their ads are not blocked by adblockers (banner network ads are useless and perhaps always were even before adblockers owing to the fact people hate them).

    The ROI on Google’s ads is pretty good, though you do need to know what you’re doing. They may be particularly good for B2B applications because this is exactly where buyers are likely to be doing research…using Google. Nice thing about the Google ads is I can buy ads which appear when people search for a competitor.

    You only pay for ads people actually click on, and even if fake clicks exist you can simply cut ads that people click on but don’t result in people spending any time on your website.

    Organic traffic stemming from good website design and SEO is better, but the two are not mutually exclusive. It also costs more to hire people to do this than ads.

    In my industry the truly useless form of advertising I’ve found is trade magazines, “thought leadership” pieces, etc. Trade magazines mostly go straight into the trash.

    Trade shows may seem old fashioned, but I think they still provide a lot of value. Nothing like actually getting out there in meat space and actually talking to people. Also lets you meet prospective customers who don’t actually know they need your product, which can’t really be done with the internet.

    The best form of advertising bar none, however, is word-of-mouth. Trouble is then you actually need to have a great (not just good) product with an appropriate price and ship it on time without quality defects. And you need to have great customer service. Now that’s hard!

  84. Mike1 says:

    We actually bother to find out exactly where our customers come from and our internet ad spend is now zero. Facebook and Google are engaged in mammoth fraud. Virtually all ad managers don’t have the competence to understand Google analytics or to create and measure from their own side.
    We have proven beyond argument that a lot of traffic is 100% fake.

  85. @Dave Pinsen

    Facebook threatens democracy, says Soros-backed foundation

    This is literally the headline in The Guardian today.

    https://www.theguardian.com/technology/2018/nov/15/facebook-threatens-democracy-soros-open-society-foundations

    I honestly believe that even a few years ago that Facebook and Twitter were not particularly ideological. They just wanted the traffic and the corresponding revenue. They are now being disciplined in order to shut down controversial opinions. Expect full spectrum dominance of all political discourse in the near future.

    • Replies: @Anonymous
    , @Dave Pinsen
  86. @Daniel H

    Similarly, I’ve never seen an ad for Waffle House, but they seem to be doing just fine.

  87. Anonymous[332] • Disclaimer says:
    @Clifford Brown

    Soros is pissed because Facebook doesn’t censor *enough*.

    Soros’s beefs are:

    - supposed Russian trolls

    - allowing criticism of Soros NGOs on Facebook and by Facebook lobbyists.

    “The notion that your company, at your direction, actively engaged in the same behavior to try to discredit people exercising their first amendment rights to protest Facebook’s role in disseminating vile propaganda is frankly astonishing to me.”

    You’re criticizing people for using their 1st amendment rights to try to shut down your 1st amendment rights. How dare you sir!

    Also included in the article: two Jews accusing each other of anti-Semitism based on mutual criticism.

    Another gem: The ADL and SPLC get lobbied (i.e. paid) to bequeath protected status. It says so in the article. How is this not a protection racket? This is literal racketeering.

    “Be a real shame if people in high places called you an anti-Semite.” (Rubs thumb and index finger together.)

  88. @Tyrion 2

    Google search is no longer noticeably superior; I think Qwant and Yandex are actually rather better. Duckduckgo also works on tech stuff at least.

    • Replies: @Tyrion 2
  89. @J1234

    I can’t think of one instance where a random online ad caught me, with the exception of movie trailers that showed promise. Can I be the only one?

    Most people go to great lengths to swat away and ignore on line ads. They are basically a form of digital mosquito. The average human probably forms a Pavlovian association of annoyance with any product featured in an online ad.

    • Replies: @J.Ross
  90. Blubb says:

    You should seek out the Ad Contrarían on Twitter. Not sure he still posts, because I’ve never really cottoned on to Twitter, quite boring if you ask me.

    Anyway, he was like the iSteve of online advertising, and honestly, as someone who’s worked in the industry, that FB and Google make so much money makes me think it’s true: they are really part of the CIA, and their job is to manipulate us all.

    • Replies: @BB753
  91. @Citizen of a Silly Country

    It’s just tough to outperform the market over the long run, and even tougher for your average Joe to figure who can do it.

    It’s not just “tough,” it’s literally impossible. At least according to the Efficient Market Theory.

    The theory, which makes perfect logical sense and is supported by a mountain of empirical data, says that all publicly available data and the collective intelligence of everyone who knows anything is already baked into the current market price.

    There will always be individual examples of people like Warren Buffet or Peter Lynch (remember him?) who can supposedly beat the market over an extended period. But, on analysis, these above-market returns can always be explained by (a) luck; (b) taking more risk; or (c) inside information.

    It’s incredibly liberating to truly understand the theory. Anyone who does will immediately fire his broker and buy an index fund. It’s the only remotely practical idea I ever learned studying economics.

  92. Tyrion 2 says:
    @Scott Locklin

    I find DuckDuckGo to be inadequate. It is hard for them though in that they take no data in order to respect your privacy. I will try your suggestions.

  93. @Enochian

    I use AdBlock all the time. It reports how many ads it blocks per site. I just looked at weather.com and AdBlock said that it blocked 24(!) ads on that site alone.

    Even before I used AdBlock, I made a point to never look at or buy anything advertised. As for sites that won’t let me in until I turn off AdBlock, f**k ‘em.

  94. @anon

    My Canadian cousin and her hubby worked for Nortel and -had- all their retirement $ in Nortel stock. They won’t be retiring anytime soon.

    I had a stock picking friend tell me in 2008 or so that I should buy Nortel because there was no way Canada would let its premier telco go bust. I did not take his advice.

    • Replies: @anon
  95. @Anonymous

    Try the DwHelper browser add-on.

  96. Svigor says:

    My rule of thumb is that the stock market knows a lot more than I do about the valuation of stocks, so I’m not all that contrarian. My basic shtick is to not be oblivious to the obvious. If the stock market says Facebook’s capitalization $414 billion, well, the amount of hard thinking that has gone into that number is a lot more than I could reproduce, so I take it for what it’s worth: the single best skin-in-the-game estimate of Facebook’s market cap.

    “NATURALISTIC FALLACY!!!”

    *Gnashes teeth*

    Oh, wait, we weren’t talking HBD. Never mind.

  97. BB753 says:
    @Blubb

    Exactly! The US government is mining Google and Facebook for data. And perhaps using it for laundering money too. You know, those billions who routinely disappear from the Pentagon and sundry federal agencies.

  98. @Hypnotoad666

    It’s not impossible. It’s just damn close.

    EMT is just a model. If it was reality, we’d call it reality. But, yes, in general outperforming the market on a risk-adjusted basis is extremely rare in the real world.

    But there are opportunities – dual momentum and microcap stocks – come to mind where I believe that it’s possible to outperform on a risk-adjusted basis, in part because you’re not competing with the big guys. But those require a lot research and discipline to achieve, and, frankly, not one in ten thousand retail investors will do it, so it’s a mute point.

    In terms of your average Joe’s chance/ability to either pick stocks on their own or find someone who can do it for them that will outperform the S&P (U.S. only) or Vanguard’s VT ETF (global stock index fund), I put it at zero. Stick with index funds.

    The iron law of costs guarantees that you’ll outperform the majority of the pros. That should be enough for anyone.

  99. anonymous[308] • Disclaimer says:
    @Redneck farmer

    Ask the Trump family.

  100. anonymous[308] • Disclaimer says:
    @Hypnotoad666

    imo there’s a strong case for someone like burry beating the market with weaponized autism.

  101. the worst advice in the entire thread is to go with index funds automatically all the time no matter what.

  102. J.Ross says: • Website

    As we slept the underpants gnomes took over the board rooms.

    Making money is so old economy.

    • Replies: @Romanian
  103. J.Ross says: • Website
    @Hypnotoad666

    For a while there Amazon (which I may attempt to abandon next year) clobbered me with ads for things I had just bought!
    Who are the ad wizards who thought of that one?

  104. MarkinLA says:
    @Citizen of a Silly Country

    Well then why did William O’Neal (Investors Business Daily) call it deworsification?

  105. @prime noticer

    That’s not what I said.

    I said that index funds are the best bet for the vast majority of retail investors, not that you can’t do better than investing in index funds. That’s the not the same thing. But the evidence is on my side. Very few people – pros or amateurs – outperform index funds. That’s a fact.

    It’s also a fact that you can do better. But the vast majority of people won’t for a variety of reasons, and they’d be far better off just keeping costs low and taking what the market will give them.

    If you want to try and outperform the market, I’d suggest these strategies:

    1. Microcap stocks
    – Integrate value, momentum and quality. Keep the portfolio to ~25 stocks. Rebalance once a year.
    2. Dual Momentum using asset classes
    – As I mentioned, Gary Antonacci’s Dual Momentum system is simple and effective. You could also use more asset classes bring in other things like correlation and volatility, such as ReSolve’s Adaptive Asset Allocation system. Nothing wrong with Meb Faber’s stuff as well.

    There are other ways to outperform, but these are the most straight-forward. The problem is that almost no one will take the time to really learn about these methods – and without taking that time to really learn a strategy, they’ll bail when it inevitably underperforms.

    Ironically, the best investment strategy isn’t the best strategy; it’s the best strategy that an investor will stick with. Most investors will stick with a strategy using index funds. They won’t stick with other strategies, which makes them inferior.

    If you can stick with other strategies, good for you, but you should realize that what works for you doesn’t work for others.

    Personally, I don’t use index funds. I use a very different system, but I’d never recommend it to someone else because they’d never stick with it because they wouldn’t understand it.

    • Replies: @David Davenport
  106. MarkinLA says:
    @theMann

    From what 0%. I doubt it will last. Michael Jordan never sold any Pepsi.

    • Replies: @Escher
  107. Dave Pinsen says: • Website
    @Clifford Brown

    I wrote about Facebook today but Seeking Alpha wouldn’t publish this one as an article (they publish 99.99% of my stuff):

    https://seekingalpha.com/instablog/131469-david-pinsen/5236698-just-gets-worse-facebook

    My thesis there is that the NYT wouldn’t have gone after Sheryl Sandberg now had Hillary won in 2016. Dem politics may be starting to shift away from Clintonism.

    • Replies: @David Davenport
  108. anon[355] • Disclaimer says:
    @Jim Don Bob

    I am sorry to hear that. A lot of good people, including some of my friends, lost big time from this defunct company. I worked for a large corporation which has its stock listed on both the TSX and NYSE for 30 years. You could take up to 12% of your annual salary in its shares. I would always sell mine every year and invest in something else. I figured a job and a pension was enough eggs in my basket with them and I didn’t want to lose anything else if the company went out of business.

    “there was no way Canada would let its premier telco go bust.”

    That just MIGHT have been true if it had been a Quebec based and headquartered company. Quebec is the sacred cow of Canadian politics.

  109. anon[355] • Disclaimer says:
    @Steve Sailer

    And yet you have all these very well educated people running all these mutual funds, pension funds, etc. and they usually do not beat their respective indexes.

  110. indocon says:

    Every $ spent on marketing is a $ not spent on improving the product, paying your people more, or just giving its back to consumer in reduced prices.

  111. anon[190] • Disclaimer says:
    @Tyrion 2

    Yeah, but why can’t they tell whether I’m on a mobile or a PC?

    They’ve changed, they used to be about finding the right info, now they’re about finding the right info for you, which entails trying to guess your intentions, which usually means getting it wrong.

    • Replies: @Tyrion 2
  112. @TheBoom

    I got into programming near the end of the dot-com boom for that reason. I made a decent living off the gold rush, and left with a marketable skill.

    Of course with the large supply of H-1B workers from India, the powers that be are making sure programming doesn’t pay that well ever again.

  113. @Dave Pinsen

    Dave Pinsen says: • WebsiteNext New Comment
    November 16, 2018 at 12:58 am GMT • 100 Words
    @Clifford Brown

    I wrote about Facebook today but Seeking Alpha wouldn’t publish this one as an article (they publish 99.99% of my stuff):

    Dave, you need a sort of introduction to iSteveniks.

    Intro: Dave Pinsen’s articles are frequently published on Seeking Alpha: Dave Pinsen Portfolio Armor.

    SeekingAlpha.com is a popular stock market stock market hot tips Web site.

    • Replies: @Dave Pinsen
  114. Tyrion 2 says:
    @anon

    Yeah, but why can’t they tell whether I’m on a mobile or a PC

    Because you have your browser’s privacy settings very high?

    • Replies: @anon
  115. Escher says:
    @MarkinLA

    And you know that how?

    • Replies: @MarkinLA
  116. I haven’t looked into this question, but are we absolutely sure that online advertising via Facebook and Google really works as well as markets assume?

    Yes. Online advertising is one area where you can actually use science ™ to verify your hypotheses.

    The problem is that Google and Facebook are natural monopolies in the advertising world. Thus they can do anything they want and advertisers will silently swallow it.

  117. Moses says:
    @The preferred nomenclature is...

    Erm…ok.

    How many online businesses have you run and how much experience with online ads do you have? Oh, none?

    I didn’t think so. Clueless middle aged dinosaurs.

  118. Yngvar says:
    @Realist

    It’s a lot cheaper to keep customers than to buy new ones, so many commercials are made to help buyers rationalize the choice: “Yeah, that F-150 I just went deep into debt for must really be a great pickup, because that ad said so. I think I’ll buy a new Ford the next time too, so I don’t look stupid with my choices.” Ads buy brand loyalty.

  119. MarkinLA says:
    @Escher

    It was long ago but he did those “New Generation” ads. He didn’t last long and even you probably don’t remember them. That’s because sales didn’t move.

  120. Anonymous[230] • Disclaimer says:

    Don’t female fashion retailers realise that most of the people clicking on their ads are men?

  121. @Citizen of a Silly Country

    If you want to try and outperform the market, I’d suggest these strategies:

    1. Microcap stocks
    – Integrate value, momentum and quality. Keep the portfolio to ~25 stocks. Rebalance once a year.
    2. Dual Momentum using asset classes
    – As I mentioned, Gary Antonacci’s Dual Momentum system is simple and effective. You could also use more asset classes bring in other things like correlation and volatility, such as ReSolve’s Adaptive Asset Allocation system. Nothing wrong with Meb Faber’s stuff as well.

    Mr. Silly Citizen:

    Please post a list of your microcap holdings, along with their prices at time of purchase.

  122. anon[190] • Disclaimer says:
    @Tyrion 2

    Nope, it’s a privacy free-for-all right now. I’m actually using Chrome, which, to my mind, ought to make it even easier for them

    • Replies: @Tyrion 2
  123. Tyrion 2 says:
    @anon

    You might as well be telling me that you went to the cinema and that for the whole showing they didn’t turn the sound on.

  124. Tyrion 2 says:
    @Moses

    My criticism, and I think the one Steve was implying, is subtler.

    Yes, they work but do the advertisers actually benefit? They’re like steroids for elite competition. They work but everyone is juicing so you get no more customers/wins. But the steroid sellers make out like bandits, in this case they’re a monopoly, and everyone else gets poorer and less healthy.

  125. Romanian says: • Website
    @Hypnotoad666

    Amazon is a web services company with a retailer attached. That is where they make the most money.

  126. Romanian says: • Website
    @Anonymous

    Here is one website. If you choose an audio format, it will take only the audio.

    https://www.onlinevideoconverter.com/mp3-converter

  127. Romanian says: • Website
    @J.Ross

    We are in a kraocracy. Rule of debt and debt as money. Even David Graeber in his book, Debt: the first 5,000 years, made the association by having debt be a first source of money.

    It’s a system whose logical endpoint is the exclusion of he who has no debt. You can see it in consumer finance, where people with no debt and who have never gone into debt are at a disadvantage, because they have no credit rating.

  128. J.Ross says: • Website

    An interesting development: 4chan owner Hiroshima Nagasaki has announced that he will split the site (which is already divided by work-safe-ness) into different domains. He has confirmed that he is doing this to be able to sell advertising on the work safe boards without having to explain or apologize for the unholy garbage that happens on the NSFW boards.
    But 4chan traffic, and wider effects, are disproportionately a result of a small number of NSFW boards. Most of the blue (or safe) boards get so little traffic that their catalogs (which let you see all active threads on a board at a glance) do not change day to day, whereas /pol/ changes drastically within an hour.
    So the advertisers are demanding (or are being presented with) less consumer eyeballs.
    Is that business sense or activism?

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