There's been a lot of noise--a lot of noise--about how Facebook's stock went down immediately after the IPO.  "Facebook now has an unlike button: NASDAQ!  Hee hee!"  Here's the truth.

(1) No serious investor buys stock for the short term.  Yes, I know there's such a thing as day traders.  There's also such a thing as poker players.  If you want to claim that either one is a profession, be my guest.

My point: serious investors buy for the long term.  One year, five years, ten years, twenty years.  So the real question is, will Facebook's stock be higher in twenty years than it is today?  Impossible to say.  But will Facebook's stock be worth more in five years?  Absolutely.  I'm willing to bet money on it (literally).  So, who cares if Facebook stock is worth $30 tomorrow?  All I care about is that it will be worth $100 in five years.

(2) Stocks are theoretically a measure of the worth of a company.  You are literally buying a piece of the company, which is worth something.  Facebook's IPO set the value of the company at roughly $15 billion.  But how much is Facebook really worth?  Prior to the IPO, people were saying $30 billion.  That's a lot smaller than Google, and yet Google feels so threatened by Facebook that they're slowly turning the entire company inside out.

My point: Facebook shares are selling for less than what they are actually worth.  That means the company is undervalued.  That means you can buy $40 worth of stock for--at the time of this writing--$32.  Remember by low sell high?  This is it.  You can bet Warren Buffet is grabbing Facebook stock with both hands.  This brings me to fact #3:

(3) The stock market became unhinged from reality some time ago.  I said above that stocks are theoretically a measure of the worth of a company, but the truth is nowadays stocks are a measure of the public perception of a company.  Maybe the initial offering was set too high.  Maybe regular people--or even investors, who ought to know better--don't understand how a web-based company makes money, especially when they give the product away for free.  Here's a hint: Facebook isn't the product.  You're the product.  And they are making lots of money off of you.  But none of that matters; what matters is whether the people buying the stock get it.  Add in some more jitters about financial markets, both domestic and foreign, and you have a cranky stock market overall.  Is it climbing in the long run?  Yes, of course; it always does.  But are there going to be significant short-term drops?  Yes, of course; there always are.

As I write this, Facebook stock went back down to $32.88.  At roughly half a million publicly traded shares, that means the market has de-valued Facebook by $100 million dollars in the last half hour.  Is Facebook actually worth $100 million less now than it was 30 minutes ago?  Of course not, that's preposterous.  But that's my point: the stock market is crazy land.  Prices--especially in the short term--have little or nothing to do with the actual value of the stock.  

And now there's a lot of "finger pointing," and people are saying that it's the bank's "fault" for setting the initial offering at $x.  What a load of nonsense.  Everyone connected with this IPO has done a fine job.  If I'm Mark Zuckerberg, I am not losing any sleep tonight.  I pointed out earlier, the price will rise over time, as investors slowly recognize the truth that this is a healthy company that's worth a lot, and that its value is growing.

Bottom line: I am buying Facebook stock right now.  And every time it goes down, I'm buying more.