Friends always ask me “Should I buy Facebook, Groupon, or Square?” I tell them to do what they want, but be prepared to lose all of their money. Digital stocks are very fickle. Most of them are very trendy and have no basis for long term growth.

I remember my girl friend Ruth being so aggravated when Groupon didn’t accept Google’s offer in 2010 for $6 billion. She kept saying to me, “How much do they need?” The truth is that most of these start-ups are on a fast track, get rich scheme, because they are not sure if their concept has what it takes on a long term basis.

If you watched Gary Vaynerchuk’s video the other day posted on this blog you would have heard him talk about the appeal of Groupon and Living Social. He said, “Remember, 36 months ago when you couldn’t wait to buy $40 worth of spa treatments for $20? Or $60 worth of Sushi for $30. These ‘deal’ sites pounded the consumer so hard that now if you offered most people a million dollar home for $10, they would still click ‘delete.’ “

Basically what Gary was saying is that there is too much “bullshit” on the consumer’s radar screen. Click thru’s on website banner ads used to be 80 per cent. Now a company is lucky if they get 40 per cent. Something has to give.

Ruth is right. “How much is enough?”

Here is a video from the experts that will explain what is happening to Groupon. Click here.