Market Overview

Author John Mauldin Likes Facebook but Not the Price


Renowned financial expert John Mauldin wrote a book called Bull's Eye Investing a few years ago, but he has taken the opportunity given to him by Wiley to condense the book down into the new Little Book of Bull's Eye Investing. Mauldin's other books include Just One Thing and Endgame, and he is the President of Millennium Wave Advisors, an investment advisory firm.

He has a loyal following of over one million thanks to his keen eye for an opportunity and ability to know when to back away. He's also extremely busy, but Benzinga caught up with him between business trips to fire a few questions at him.

In a nutshell, what is bull's eye investing?
You're just trying to get relative returns. When it's up 30, you want to be up 35. In a secular bear market, your bench mark isn't the stock market, your bench mark is zero. How much better than zero did I do. Because you cannot trust the stock market to give you those long term higher returns. We're 12 years into this secular bear. We're getting to where we can say it's closer to the end of it. We're still not quite there yet.

It seems like such a fluid subject. Did anything change between books?
Not really. The basic principles I started coming to and laying out in the late '90s. I was calling for a secular bear moving to a long term bonds and zero coupon bonds. Could you see a bubble happening? Yes. I talked then about buying all of the things that you would talk about from a perspective when you can see a bubble forming. I wouldn't suggest doing that type of thing today because the market's changed. Could you see a bubble in housing? Sure. Could you see the credit crisis coming because of sub-prime debt? Yes. I did that, but that's different today. If I go back and look at the basic principles of what I wrote about in the first book, then no, the principles are the same. It's the specific that get different.

Finally, and very on-topic, do you like Facebook (NASDAQ: FB)?
You're asking me two questions really. The answer is yes I like Facebook, but no I don't like the Facebook price. Be sure to put a link to my Facebook page in this article. You almost feel like you have this two-sided thing. Gee, I don't think I'd buy Facebook at this price but please do link to my page and click 'like'. It has a value. Will it become as valuable as it was at the price? Yeah, someday in the future but I don't know if I've got the patience to wait around. I think there are better opportunities. It looks like the investment banks that got that stock out got every penny they could. They didn't leave much for the investors for a pop. That's not unusual.

Follow me @BCallwood.

Posted-In: Trading Ideas Best of Benzinga


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