Raining on Google's parade
1) Crazy or Brave? Skeptic Remek Says Sell Google
2) IT'S DEJA 'GOO'
3) Soul searching
4) Google: The Bear Case
5) St Lawrence of Google
UPDATE - the link (below) just now included!
6) The Rising Tide of Google
I said this previously, but it bears repeating: Having missed the bullish call, analysts and other armchair market commentators are falling all over themselves to make the bearish call. And while they all trash Henry Blodget, they remain seemingly blind to the sameness of their call to that of his; the sole difference is merely one of direction. Yawn.
And speaking of Henry Blodget, at least he roots around for the cause of Google/GOOG's possible share price decline. Of course, being an analyst, Henry prefers to view this coming decline through the filter of negative corporate performance, temporary or otherwise. Sometimes, however, stocks decline due solely to the weight of their rise.Yes, issues and even problems will emerge at the company. Yes, the market will sit up and take notice of those changes, issues, and problems. And yes, the shares will decline. Will the cause of this coming decline be centered on corporate performance or the stock's performance? After all, success ( a rising share price) sows the seeds of its own decline. To think otherwise is folly. But will the decline be prefatory to a base or a bear market?
Which is one reason [why] I sell a rocket ship such as Google/GOOG as it reaches escape velocity -- no company and no stock has ever grown to the sky. Google/GOOG, too, will re-enter earth's gravity sink. But as I just now asked, will this event cause anything more than a slackening of Google/GOOG's upward trajectory? This is the reality of stocks -- that they have a life-cycle.
In the end, the charts tell all. I hope to alert you to that change the moment it occurs. Of course, please keep in mind that we each have differing objectives, risk tolerances, and time frames.
Finally, Google/GOOG reports Q4 2005 2½ weeks from now...
"There are 35 soothsayers covering Google Inc., the Internet search company whose stock has risen more than fivefold since it sold shares in August 2004. Seven have a ``hold'' rating, while 27 have the company as a "buy," according to Bloomberg data.Continue reading here.
Remek, who works for Guzman & Co. in Coral Gables, Florida, is the only one advising clients to sell. Google currently trades at about $470 a share, for a market value of almost $140 billion. Remek calculates the stock is worth just $260.
'It seems most of the world remains bullish on Google,' says Remek, who turns 39 next month. ``You have to have very aggressive assumptions about growth over the next, say, five years to justify the current valuation. I cannot come up with a target price at this level or above, as most of my peers have."
2) IT'S DEJA 'GOO'
"But before getting into the details of what is now happening in the world Blodget left behind, first a bit of background to help remind us as to how even well-run, profitable businesses — which Google certainly is — can nonetheless become rocket rides to ruin . . . not just for individual investors, but ultimately for the whole market."Continue reading here.
3) Soul searching
"By any standard it is the most astonishing company to hit the planet (will we have to rename it Google Earth?), the 20th century's version of the philosopher's stone, turning the useless ones and noughts of computer code into shareholders' gold and consumers' enlightenment."Continue reading here. (BTW, I enjoyed this writer's authorial style; he is a real hoot at times!)
4) Google: The Bear Case
"No one else is writing this piece, so it will have to be me. I should say upfront that I'm not predicting that this will happen (yet), and I'm certainly not making a recommendation. I'm just laying out a scenario that could kneecap Google and take its stock back to, say, $100 a share..."Continue reading here.
5) St Lawrence of Google
"DOES Larry Page ever get vertigo when contemplating his life and future? After all, Mr Page and Sergey Brin, the co-founders of Google, the world's most popular internet search engine, can legitimately claim to have caused an information and media revolution. At 32, they are already worth far more than $10 billion each and fly around in their own Boeing 767. Bill Gates fears them; others in the industry admire or envy them, and some seem to consider them capable of anything. Expectations are dizzyingly high."Continue reading here.
UPDATE - the link (below) just now included!
6) The Rising Tide of Google
"This week, these acolytes of the Oracle of Omaha grew bigger than Berkshire, with a market capitalization of $139 billion, raising the question: Is Google on par with Berkshire? Admittedly, it's a little perverse to compare the poster child of growth stocks to the home of the world's most famous value investor. Berkshire has about 180,000 employees, Google about 5,000. Berkshire helps people insure cars, Google helps people find pictures of Lindsay Lohan. Berkshire's revenue grew 7% from the third quarter of 2004 to the third quarter of 2005, Google's nearly 100%. But if Google is to justify its chunky market cap, it may need to get a lot more Berkshire-like..."Continue reading here.
I said this previously, but it bears repeating: Having missed the bullish call, analysts and other armchair market commentators are falling all over themselves to make the bearish call. And while they all trash Henry Blodget, they remain seemingly blind to the sameness of their call to that of his; the sole difference is merely one of direction. Yawn.
And speaking of Henry Blodget, at least he roots around for the cause of Google/GOOG's possible share price decline. Of course, being an analyst, Henry prefers to view this coming decline through the filter of negative corporate performance, temporary or otherwise. Sometimes, however, stocks decline due solely to the weight of their rise.Yes, issues and even problems will emerge at the company. Yes, the market will sit up and take notice of those changes, issues, and problems. And yes, the shares will decline. Will the cause of this coming decline be centered on corporate performance or the stock's performance? After all, success ( a rising share price) sows the seeds of its own decline. To think otherwise is folly. But will the decline be prefatory to a base or a bear market?
Which is one reason [why] I sell a rocket ship such as Google/GOOG as it reaches escape velocity -- no company and no stock has ever grown to the sky. Google/GOOG, too, will re-enter earth's gravity sink. But as I just now asked, will this event cause anything more than a slackening of Google/GOOG's upward trajectory? This is the reality of stocks -- that they have a life-cycle.
In the end, the charts tell all. I hope to alert you to that change the moment it occurs. Of course, please keep in mind that we each have differing objectives, risk tolerances, and time frames.
Finally, Google/GOOG reports Q4 2005 2½ weeks from now...
David M Gordon / The DeipnosophistWhat: Google Inc. will report its financial results for the fourth quarter ended December 31, 2005.
Date: Tuesday, January 31, 2006
Time: 4:30 PM ET/1:30 PM PT
Webcast: The live Webcast of Google's earnings conference call can be accessed at http://investor.google.com/webcast. The Webcast version of the conference call will be available through the same link for approximately two weeks following the conference call, after which time Google will include the Webcast in the "archive" section of the Google Investor Relations website.
posted by David M Gordon | 5:47 AM
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