I Will Play the Facebook IPO

When I read Al Lewis' column in the Wall Street Journal, Facebook, Dead or Alive, last week Sunday, I had to laugh. Quoting himself from a previous colum in 2004 he wrote, "Google's growth curve won't last forever. It's only a matter of time before someone gobbles Google's lunch." He went on to point out that since the IPO Google's stock has soared 580%.

Oops.

And oops is right, because I've admittedly kicked myself as well more than a few times for thinking Google was just a fad, and that it's stock would eventually be as worthless as nearly all Internet stocks eventually wound up. I didn't play the Internet boom when it was literally going through the roof mainly because I simply couldn't grasp how any of them would make their money. How in the world could a company have a valuation in the hundreds of millions of dollars, even in the billions of dollars without a headquarters and at least some revenue to speak of?

In the end that question certainly was a good one, and while I could have cashed in on short term gains, I simply chose to stick to what I knew.

But Google has been a different beast, and unlike the other Internet stocks of their time, Google actually does have a headquarters, and they do certainly make plenty of revenue. And so far as I can tell, nobody has come along to gobble Google's lunch, and there doesn't seem to be anyone immediately around the corner to take a good shot at it. Google will likely continue to perform well, and despite it all, I have yet to ever own a single share of this company and have no intention to buy any shares now.

Perhaps that's simply because I have this sort of luck that once I plunge into an old winner like this one, things tend to take a swift turn in the other direction. Might I only add here that I was late into Krispy Kreme as well and as soon as I finally pulled the trigger and opened a position, besides the holes in their doughnuts, that decision wound up leaving a hole in my portfolio.

To quote Homer Simpson, "D'oh!"

Facebook, on the other hand, gives me pause. It is a real company, and I do think they can make money—and they are. And let's face it, their subscriborship appears to be on a relative continuous growth curve. People, so far as I can tell, still like Facebook, and newcomers keep rolling on in, in droves. Like Google, I'm just not sure there's anyone who will be able to top Facebook's appeal in the near term.

For that reason I'll be going in on this one. Granted, I will by no means bet the farm. And I intend to only go in for the short term. But I think it's a play that will certainly prove well worth it. For all I know this thing may well gobble my lunch. But if it doesn't, and I think it won't, it certainly is not going to be another one that got away.