When it rains, it pours.

That is how Facebook founder Mark Zuckerberg must feel after suffering two black swans in two days.

First came the disclosures that a client, Cambridge Analytica, used the information from 50 million Facebook users to help the Russians influence the 2016 presidential election.

Today, we learned that the company is being investigated by the Federal Trade Commission for failure to keep customer information private.

As a result, the company has lost all of its 2018 year-to-date stock performance, and is now taking a big bite out of 2017.

The question now arises, what should you do about all of this as the educated investor?

Facebook is one of the most widely owned companies in the world, right after Apple (AAPL). It often is the largest single position of many major institutional investors. And there isn't one that isn't salivating at adding to its position at fire-sale prices.

For the first time in ages, Facebook is now selling at a screaming discount to the main market, with a PE multiple of only 16.5X at today's low, compared to 19X, and 14.5X if you strip out cash on the balance sheet. Facebook has in effect become another Apple (AAPL) in valuation terms.

Fundamentals have not changed. Some 66% of advertisers say they will increase their spend over the next year.

Regulatory fear is overdone, and it is difficult to imagine in what form that such regulation would take. What, an (FB) friend tax on your account? I would go broke.

If anything, more regulation could be a net positive for (FB), as it creates a deeper moat with which it can protect and grow its business. For more depth on this topic please read today's issue of the Mad Hedge Technology Letter.

The barriers to entry for new competitors, already huge, are about to become insurmountable.

The worst case is that founder Mark Zuckerberg may have to undergo an unpleasant appearance in front of the technophobes in congress.

The company is growing at a compound 30% annual rate and is far and away the dominant player in a deeply moated space. In other words, it is still a company whose shares you should die for.

We'll know for sure when the company gives its Q1, 2018 earnings report after the market close on May 2.

In Q4, 2017 it announced an earnings per share of $2.21, a beat of 26% over analyst expectations. Revenues rose by an eye-popping 47.2% to $12.97 billion for the quarter YOY, a beat of $420 million.

Full year 2017 free cash flow came to $17 billion. Q4 operating income came to $7.4 billion representing a 53% profit margin.

Some 89% of the company's ad revenues came through mobile phones.

There are now 2.1 billion people using Facebook, and 1.1 billion on a daily basis. Some 700 million come to the site daily to buy and sell things through Facebook market.

Its WhatsApp subsidiary has 1.5 billion users who transmit 60 billion messages a day.

Its Oculus Rift entry in the virtual reality gaming space, to which my own kids are hopelessly addicted, is the front-runner in the field.

You might want to wait for the smoke to clear and the dust to settle. However, right here right now at $162 a share it would be perfect for your long-term "buy and forget" portfolio, not only for you and your kids, but for your grandkids as well.

I'm Willing to Bet on the Zuk

Yes, that's right, you read it correctly, almonds.

By now, many of you have figured out that I like calling my paid subscribers to find out how they find the service. I always ask for suggestions for improvements. Then I ask what they do besides trade the markets.

I get an amazing array of answers. One reader flew helicopters in Alaska to inspect oil pipelines, executing trades on his cell phone in between flights. Another ran a Russian hedge fund in Moscow.

The sheep farmer in Australia relied on me as his connection with the rest of the world. The family office in Spain valued my American view of the world.

Then I called a subscriber in Modesto, Calif., who said he was in the almond business.

My interest piqued, so I proceeded to grill him. And with that, I obtained a fascinating insight into an obscure corner of the global economy.

If you thought marijuana, estimated by the Drug Enforcement Administration to be at $6 billion a year, was California's largest cash crop, you'd be wrong.

Grapes used to be our largest legal crop, at $5 billion a year. But almonds will beat all this year, possibly reaching as high at $8 billion.

You can blame the six-year California drought, which was then followed by a year of flooding of biblical proportions.

This has driven the price of almonds from $1/pound a few years ago to as much as $4/pound today.

The price spike has ignited fierce water wars across the state, with increasingly desperate farmers battling over an ever-diminishing commodity.

Those located in the eastern half of the Central Valley (which you will remember from your freshman English class in The Grapes of Wrath) are sitting pretty.

They have long-term contracts to buy water from federal public works projects at subsidized prices that date back to the Great Depression.

These rights can make or break the value of a farm, and are passed down from one generation to the next.

The eastern half of the valley is another story. When construction of Interstate 5 was completed in 1979, most of it was still barren desert, a rain shadow effect of the state's coastal mountain range.

Only the oil industry was there in force, especially around the Elk Hills oil find (watch the Daniel Day Lewis movie, There Will Be Blood). I know because my grandfather worked there for Standard Oil during the 1920s.

So when large-scale farming developed there during the 80s, they had to buy water on the spot market.

The problem is that during a drought, there is very little water for sale. So parched farmers have turned to drilling to irrigate their fields.

This has led to an even bigger headache. In the 19^th century, you could drill 100 feet and find all the water you wanted.

Today, they have to go as deep as 1,200 feet, and even these ancient deep aquifers are drying up. And that's assuming you have the $1 million it costs to drill such a well.

Indeed, the elevation of the Central Valley has fallen by 10 feet over the past century because of the underground water that has been withdrawn so far.

Destruction of rural buildings through catastrophic subsidence is becoming widespread.

The only alternative is to let your crops die. You see this in abundance while making the drive from San Francisco to Los Angeles, withered trees frozen in tortured and grotesque death throes.

Also plentiful are irate billboards attacking the government for depriving local farmers of their cheap water.

Even if you have plenty of water, it is still not smooth sailing in the almond business these days.

China is the world's largest buyer of almonds. The demand there has been so great that the Chinese have become major buyers of almond farms throughout the state, at premium prices.

However, the Middle Kingdom's recent anticorruption campaign is starting to take a big bite out of sales.

In years past, individuals would buy dozens of boxes of almond cookies to pass out to friends, customers, employers, government officials and regulators during the Lunar New Year celebrations.

Not so today. The difference has led to the cancellation of a few shiploads of the prized nuts.

My friend kindly invited me to tour his roasting and packaging facilities the next time I was in the neighborhood.

I was left thinking, this really is a global economy that is so integrated that, when a butterfly flaps its wings in Brazil, it causes a typhoon in Japan.

It also is a great example of how information about one asset class can provide insights about all the others.

With that, I opened a fresh bag of healthy unprocessed Nut Up almonds that I picked up at Save Mart and grabbed a fresh handful. I hear they're going to sponsor a NASCAR driver soon to bring healthy food to the hinterlands.

Another Batch for China