Posted by Leonard Steinberg on May 21st, 2012

All the hoopla surrounding the IPO of Facebook and to-day’s swoon of almost 10% in its valuation leads me to believe one should be very careful about over-hyped product….including real estate. I do believe Facebook to be one of the most over-hyped companies on earth: is it really worth so much more than UPS?

The best advice I have ever been given in stocks is firstly to fully understand the company and secondly to do lots of homework, buying into valuations based on fact, rather than hype….Warren Buffet-style.  The same is true when in a multiple bidding situation for real estate: should you pay X dollars over the asking price? Or should you pay what your (thorough + realistic) research tells you its worth? A solid and honest broker will be able to provide a good chunk of this factual material. Most times a property that everybody wants is under-valued…..but sometimes hype can cloud  judgement. What exactly does the property deliver? What exactly does Facebook deliver?

There are lessons to be learned all around us, every day….