Should Palm Beach trustees buy Twitter www.twitter.com & Facebook https://www.facebook.com/pages/Pankauski-Law-Firm-PLLC/223065554446549?ref=br_tf now? Are these two US companies merely high-flying speculative stocks chased by momentum investors? Or are they something historic, defining the new technology & services of social media–and our future? Do their recent stock prices represent a unique & very special buying opportunity for Palm Beach trusts which, 5 -10 years from now Palm Beach trustees will look back on and ask “Why didn’t I buy more?” Or is the recent downdraft in their stock prices a harbinger of more bad news? Here are some thoughts for Florida trustees when considering social media stocks and what may be prudent for Palm Beach trusts under Florida trust law.
What Does it Mean for a Florida Trustee to Be Prudent?
- Florida Trustees need to invest for growth & stability.
- Palm Beach trustees need to diversify your Florida trust investments
- Have a strategy which includes
- Production of income & also capital appreciation.
When a Palm Beach trustee attempts to comply with his or her Florida law fiduciary duties under the Palm Beach trust document, and Florida’s prudent investor rule, it permits the trustee to buy on the dips: to invest when opportunity strikes. But it needs to be part of your trust investment plan.
Q: Can a Palm Beach trustee get in trouble for buying social media stocks?
A: Only if you invested the Florida trust assets improperly or imprudently. (For more, see your Palm Beach trust lawyer, co-trustee, or your “investment agent” who you appointed under the Florida Trust Code to help you.)
Are Social Media Stocks On Sale ?
Facebook (FB) traded above $56 last week, well off its $72+ high, but far above the $22 or so that it traded at within the last year.
Twitter (TWTR) has gotten crushed in recent weeks, in the middle (at the top?) of the tech and biotech selloff. At $46+, it is well off its high of $74 and very close to its initial (IPO) trading day of about $39. (The IPO was priced lower).
Buy or run for the hills?
Does a Florida Trustee Need Social Media in the Trust Investment Portfolio?
Q: should a Palm Beach trustee buy Social Media : now or at all?
- The way we communicate has changed substantially over just the last 5 years
- Twitter and Facebook are now leaders in the way we interact, touch base and reach out
- They are dominant players in the Social Media
- Can they be replaced? Sure
- Do we think they may be replaced?
- Each company is trying to create more ways to add to revenues and buy companies, or think up ways, to provide more services
- If you think they’ll get it right, consider buying
- But remember: years ago when the internet and email first started, there were a number of internet service providers and email providers which aren’t around today. Who knows what fate holds for these social media leaders?
Advice For Palm Beach Trustees Buying Social Media
- Don’t overconcentrate (if you are not sure about this, ask your Palm Beach trust lawyer)
- Watch & monitor: you may want to buy over time, rather than in one swoop (is patience = prudence? )
- Consider the ALTERNATIVES to putting your trust money in Twitter & Facebook
- Consider the technology component of your trust investments and whether more tech, or social media is a good fit for your Palm Beach trust investment strategy
- Don’t plan on trading.
Oh yes, many believe that Twitter is on track to create lots of new $$$. Twitter has new ads and products to offer which investors are hoping will add to revenues. To read more about it, check out the recent Wall Street Journal article about it: http://online.wsj.com/news/articles/SB10001424052702304441304579481614220149076?mod=WSJ_hp_LEFTWhatsNewsCollection&mg=reno64-wsj