It’s Time to Admit Ignorance in Tech Investments: Facebook Inc (FB), Apple Inc. (AAPL)

However, Activision Blizzard, Inc. (NASDAQ:ATVI) proved they could do it throughout 2012 with consistently positive earnings reports. I told you then what you hear in the earnings report now.  This is a company with a formula for success that had solid plans on which it executed in a familiar manner.  You don’t need to know the intricacies of game development like I do to see this is a consistently profitable company.

In fact, what we don’t know about this tech investment has nothing to do with its business: it’s other investors.  I had to face facts before appreciating this undervalued company.  Other investors are simply terrified of this otherwise decent $14.80 billion industry.

Lose Money With Friends!

Did you hear that Facebook made something called graph search and that Zynga Inc (NASDAQ:ZNGA) is heading into the online gambling space?

Any idea how their businesses will actually make money?

These two stories of IPO tragedies have shown strong numbers of users, but have yet to deliver on a profitable innovation.  While Facebook is figuring out new ways to present ads to users, and Zynga tries to funnel theirs into an already-saturated gambling space, nothing has fundamentally changed for these businesses.

Like their user count, the cash behind these companies is huge — large enough to fund many attempts before total failure.  Facebook’s recent fiasco around Instagram’s user agreements frustrated Instagram enough that its user count is down 42% from its usual figures.  But this is great news for investors: Zuckerberg is serious about making money.  Zynga’srecent earnings report wasn’t spectacular, yet investors are riding high on speculation about the U.S. taking steps forward with online gambling.

So do we know how these companies will make money, yet?

No. Zynga can’t keep dramatically cutting its costs and Facebook’s graph search has strong competition against a Google (NASDAQ:GOOG)+ network that is making solid headway toward Facebook’s numbers.

Knowing A Good Tech Investment

Raising Google+ to become the #2 social network is but one of many advances Google Inc (NASDAQ:GOOG) has made as a strong, well-recognized, and well-understood tech business.  Though investors may see the high stock price as the mark of a missed opportunity, one software engineer outlines how Google’s development patterns mark the beginning of long-term gains.  Click here to find out how a new mentality in software production sends Google soaring into a future of self-driving cars, augmented reality glasses, and more.

Oh, you really can’t live without the hysteria? Fine, Google’s got you covered there too. Speculations about Google matching Apple stores can be just as fun as iWatch rumors, yes? Admittedly, Zynga’s recent hike is much more exciting than Google’s dull climb to just another all-time high.

When the hype turns into fatigue, we invite you to the ol’ bored and informed side.  It’s a different sort of enjoyment, but you might get into it in the same way you have fun with your other, non-tech investments.

The article It’s Time to Admit Ignorance in Tech Investments originally appeared on Fool.com and is written by Danny Favela.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

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