I Own MySpace

Last fall I took a night Finance class through the University Extension program. The program is intended for young professionals who want some kind of continued business education. Most of the people in the class worked at Dell or Freescale or some place like that. The class had a stock investing project that has now led me to believe that I know enough to be dangerous.

Everyone in the class got an account with Investopedia.com and we were given $100k in Investopedia play-dollars with which to invest. Market orders were $20 and limit orders were $30. We were ranked in the class based on how much we grew our portfolio. In the end I finished second in the class growing my portfolio $16k in a little over 3 months time. The math is easy, that comes out to 16% growth. I became pretty fanatical about the project, checking my account everytime I got on a computer, DVRing and watching MadMoney religously, and setting up alerts to send text messages to my cell when stocks hit certain prices.

I made a good chunk of my change riding the Google wave but the rest was predominantly made short-selling which automatically classifies me as an AntiChrist in the eyes of many investors. Short selling is the opposite of long selling in that your are betting the stock will go down. For me it was easier to identify a shitty company than to identify a good company that will also be seen as a good company by other investors. So off I went short selling Blockbuster, GM, Ford, Dell, and a couple weird companies that nobody has heard of.

You may wonder why I don’t try to make real money trading stock. The majority of the money I have invested from my internships and what not are in a Mutual Fund. There are three reasons for this. 1) It takes a lot of work to buy and sell individual stock and to constantly monitor things 2) I am not convinced that the project wasn’t luck and 3) the fees are too high for my means. $20 and $30 fees for a $100k account is nothing. Fidelity charges me a $30 fee per transaction so a $300 purchase would have to grow 10% just to overcome the fee. The magnitude of the Investopedia account helped to dilute the fees on every transaction which was good bc I made tons and tons of transactions.

Fast forward to a couple of weeks ago (I tried to find a more confusing way to word that but I couldn’t). I was in the airport flying back from my Florida vacation and I saw a Wired Magazine with Rupert Murdoch on the cover. I had heard the name but I really didn’t know who the guy was. I picked up the mag and read the article right there in the store, I know a pretty schiesty thing to do, shoot me.
In short Rupert Murdoch is the man. He runs News Corp which owns Fox, Fox News, Fox Sports Net, the New York Post, and as of late MySpace. I was immediately a fan bc as most people know the reason Fox News and blogs are blowing up is because they provide an alternative to traditional liberal biased media. If you don’t believe in media bias whether it by East Coast bias or Liberal bias you really are just choicing what you want to believe.

When I got back to New York after looking into it a little bit more I bought some News Corp (NYSE: NWS). So now I can legitamately say I own MySpace granted I am in for a couple hundred bucks in a company that has a Market Cap of $18.3 Billion.

I decided News Corp has a bright future for a few reasons:

Fox News went from nonexistent to #1 in cable news in 5 years. You always got to love a good underdog overthrows the evil empire story ala Dell v IBM, Fox News v CNN, and about to be Google v Microsoft.

Fox has all 5 BCS bowl games this year. They have every World Series and All Star game through 2013. They’ll have the 2008 Super Bowl. They have the world’s most popular TV show in American Idol and above all they have atleast three more seasons of the greatness that is 24.

But the most important piece of their portfolio that sold me was the MySpace piece. Traditional media is at a crossroads although those selling points for Fox and FoxNews are better than what most have to offer. The marketing value in controlling MySpace will be huge. Lets say one company had the sole rights to sell advertising space on every roadway in the US? Well one company is approaching having something analogous to that in the virtual social networking world. And on top of that they have a real good idea, better than anyone else atleast, what types of cars are on those roads, who is driving, where they are driving, why they are driving, etc. You think companies would love to tap into that marketing knowledge? I do too.

This week I open a package from my dad. In it, a few cut out newspaper articles and a copy of the Rupert Murdoch Wired magazine. Again, great minds think alike.



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