Google.

[RYL]

GOOG. I say we all jump the bandwagon. Anybody agree or disagree and why?

[kiffl]

No way...you are about 4 months to late.

[joshman1204]

I still think this is a $280-$300 stock but I dont know if this market will allow it to get that high. If we get a good broad rally then $300 should be pretty easily attainable in my opinion. I have some $300 calls on goog and a few higher ones just for pure speculation but I wouldnt be willing to put a large long position in at this point.

[gdut0n]

I just completed a stock project on Google for my economics class. You are about 8 weeks too late, but I still would not rule out buying it. You have to think a split is coming soon. Google has a fairly solid base; Adsense is a gold mine for them, and online advertising is on its way back, becoming one of the most profitable things on the internet. On top of that, Google's AdSense makes it so easy and practical for any size business to take advantage of it. One last point is that they are opening up an office in China, which could really help them out being the fastest growing economy in the world at the moment. Just my thoughts, too bad I am not set up, or old enough to get set up, for buying stocks. /images/graemlins/mad.gif

[Paluka]

I say either put your money in GOOG or put in all on red. Same damn difference.

[gvibes]

[ QUOTE ]
I say either put your money in GOOG or put in all on red. Same damn difference.

[/ QUOTE ]

If Google tracks the market as a whole, there is a difference. A positive expected return in one case, and a negative in another.

[michiganfan9]

Too late get out. Look for some undervalued companies that still have good eps, p/b, p/e.

[montechristo]

yeah a split is coming. recently upgraded, thinking this will be in the $350 range in 6 months?

[Beezos]

i heard managment will split the stock...

[RYL]

I told my dad to buy it and he's f-ing thrilled!!! I'm really getting into stocks now. I plan on becoming a stock trader.

[Paluka]

[ QUOTE ]
I told my dad to buy it and he's f-ing thrilled!!! I'm really getting into stocks now. I plan on becoming a stock trader.

[/ QUOTE ]

What reasons did you give when you told your dad to buy it?

[RYL]

[ QUOTE ]
[ QUOTE ]
I told my dad to buy it and he's f-ing thrilled!!! I'm really getting into stocks now. I plan on becoming a stock trader.

[/ QUOTE ]

What reasons did you give when you told your dad to buy it?

[/ QUOTE ]

Volume precedes movement and a plethora of other reasons; so much so I don't even want to go into details because I'm afraid my fingers are going to fall off my hands typing all the information.

[Paluka]

[ QUOTE ]
Volume precedes movement

[/ QUOTE ]

what on earth does this mean?

[imported_ncray]

A lot of trading activity (volume) comes before movement (the stock going up or down).

[michiganfan9]

Since i'm a long term investor i would probably disagree. others most likely will agree but its book value is no where near its trading value. Extremely overvalued in that sense and i think it'll level off after a few years. Wut do u guys think?

[RedManPlus]

The $300 price has no meaning.

GOOG is exactly like any stock...
That runs up from $20 to $30.

At $300 GOOG trades for about 40-45 times next years earnings...
Cheaper than EBAY or YHOO...
With MUCH more upside.

Why the upside?

It's something few people understand.

Google is not a "search company".

Google is a "custom-built supercomputer" with proprietary operating system...
With ** by far ** the world's cheapest storage and computer power...
That is being leveraged for profit by the smartest hackers in the world.

Go back and re-read the previous statement.
The key words are "cheapest" and "smartest hackers".

Click to Read "The Secret Source of Google's Power" (http://blog.topix.net/archives/000016.html)

Click to Read "GooOS - The Google Operating System" (http://www.kottke.org/04/04/google-operating-system)

Google's long-term plan...
Is to take the desktop away from Windows and MSFT.

Someday soon...
Your average person will no longer need a computer, hard drive, Windows, MS Office, etc
Just a simple "browser appliance"...
That will log into Google's supercomputer...
Your mail, word processing, 90% of what you need...
Will be sitting there perfectly safe and sound.

Hardcore techies, business will still buy computers...
But not 6 billion average people.
GOOG will give them everything for FREE.

That's why GOOG may actually be worth $3000/share...
Because it's not about "search"...
They are engineering a historic "paradigm shift"...
In the way people interact with computers.

rm+

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[James Boston]

I'm not trying to give you a hard time, but you've got to get away from this book value thing. It's not that important of a figure.

[michiganfan9]

The only reason why i mention it soo much is because i'm a follower of warren buffet. That's all

[michiganfan9]

It's all about long term investing for me cuz i'm 15

[James Boston]

I think you're misunderstanding Buffett's methodology. I've read books about his investment approach too. I don't recall book value ever being mentioned. As I've said before, his approach to determining value is primarily centered aroung what he calls "owner earnings."

net income + depreciation - capital expenditures

this is also known as free cash flow

If picking good stocks were as simple as looking at 2 figures, the book value and the trading value, then you could teach anyone in under 2 minutes how to make as much money as Warren Buffett. You're over-simplifying it.

[AceHigh]

[ QUOTE ]
but its book value is no where near its trading value

[/ QUOTE ]

Book value is probably the single worst metric for measuring the value of a company. Sometimes a company can be a value because it's been down on it's luck and worth less than it's book value, but that's about the only time it's important.

The beauty of internet stocks is that they can be huge companies and have small book values. They don't need a store in every town in America because they have a store in everyone's house with the PC's they own. So book value is especially useless in evaluating companies like EBAY, YAHOO and Google.

[AceHigh]

[ QUOTE ]
Cheaper than EBAY or YHOO...
With MUCH more upside.

[/ QUOTE ]

Isn't YHOO Google's competition? I thought they were fighting for the same market, the portal/search engine market.

I like Google, I think they are better than Yahoo...but I think they are fighting for the same upside, aren't they?

[OtisTheMarsupial]

They claim they are different.

I too prefer Google (I like the "I'm feeling lucky" option).

[RedManPlus]

Did you read my post?

GOOG and YHOO are quite different...
In terms of technology and culture.

Because GOOG has a one-of-a-kind supercomputer and OS...
(Which would take years for a competitor to duplicate)...
They can provide millions of people with storage and computer power...
Say 20-30% cheaper than MSFT or YHOO...
Who run standard off the shelf hardware.

That means GOOG can breakeven on something like GMAIL...
While MSFT and YHOO have to run a similar offering at a loss.

GOOG has a huge competitive advantage...
And is constantly forcing MSFT and YHOO to provide services at a loss.

The game that began with the IPO has just begun...
And is still in the 1st inning.

rm+

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[RYL]

[ QUOTE ]
GOOG. I say we all jump the bandwagon.

[/ QUOTE ]

My statement still stands. Buy it while it is as cheap as it is. It looks like the beginnning stages of the next MSFT.

[michiganfan9]

The only reason why i talk about book value is because i'm a follower of warren buffett.

[James Boston]

Owner Earnings (http://www.fool.com/news/commentary/2005/commentary05051108.htm)


Or how about this....

BRK, as I'm sure you know, recently acquired a significant stake in BUD. I owned some BUD prior to that so I followed what happened. The news of BRK's purchase initially sent it up a bit but it leveled off. It is still within a dollar per share of what BRK bought it at.

As of 6/6/2005:

BUD price/book - 14.12
BUD book value per share - $3.35
BUD - $47.26 per share

Why did Buffett do that?

[michiganfan9]

[/ QUOTE ]

My statement still stands. Buy it while it is as cheap as it is. It looks like the beginnning stages of the next MSFT.

[/ QUOTE ]
msft is one of the most overrated stocks on the market. why would you want a company to be like that? Nothing against GOOG because it seems to be doing quite well and is too much competition for yhoo but i probably wouldnt want it to be msft. Plus msft has many other things that it has to create business not just web browsing and so one. Although goog has put together gmail and others.

[RedManPlus]

You sorta missed RYL's point.

He's saying that GOOG in 2005...
Is a lot like MSFT in 1987.

MSFT went public in March 1986...
At $21.00/share...
And was bid up to $27.50 on first day of trading...
Roughly 20-25 times earnings.

In 19 years...
MSFT stock has increased in value 300 times...
Which is a 35% annualized return.

GOOG has already tripled.

And it's not being bid up by Joe Blow on Main Street.

GOOG is being bid up by very sophisticated hedge fund managers...
That NEED to have a piece of the relatively small float.

rm+

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[Sniper]

[ QUOTE ]
Someday soon...
Your average person will no longer need a computer, hard drive, Windows, MS Office, etc
Just a simple "browser appliance"...


[/ QUOTE ]

Computers in every home will not be going away.

What they will look like in the future is still an open debate, but going back to the era of dumb terminals... I think not.

[michiganfan9]

sorry about misreading that. I wasn't born when msft came out with their IPO.

[FMThe2nd]

[ QUOTE ]
He's saying that GOOG in 2005...
Is a lot like MSFT in 1987.

MSFT went public in March 1986...
At $21.00/share...
And was bid up to $27.50 on first day of trading...
Roughly 20-25 times earnings.

In 19 years...
MSFT stock has increased in value 300 times...
Which is a 35% annualized return..

[/ QUOTE ]

Google is likely not at all like MSFT in 1987. GOOG is already worth $82 billion. I believe the biggest stock today is GE at ~$400 billion. If GOOG were to increase in value 300x, then it would be worth $24,000 billion ($24 trillion?). Not gonna happen in our lifetimes.

GOOG may well become the biggest company on Earth, but expecting anything like a 300x gain from here is crazy. A 10x gain from here would make it twice as big as GE. That would be the uppper, uppper end of my expectations if I owned it. And I wouldn't expect that for at least 10 years.

GOOG will soon run into the law of large numbers and it's growth will slow way down. That doesn't mean it's not currently a good investment, but it does mean that you won't see anything like the return investors who held MSFT in 1987 saw. To get a MSFT-1987 like return you should be looking at companies worth less than $1 billion.

[RYL]

[ QUOTE ]
[ QUOTE ]
He's saying that GOOG in 2005...
Is a lot like MSFT in 1987.

MSFT went public in March 1986...
At $21.00/share...
And was bid up to $27.50 on first day of trading...
Roughly 20-25 times earnings.

In 19 years...
MSFT stock has increased in value 300 times...
Which is a 35% annualized return..

[/ QUOTE ]

Google is likely not at all like MSFT in 1987. GOOG is already worth $82 billion. I believe the biggest stock today is GE at ~$400 billion. If GOOG were to increase in value 300x, then it would be worth $24,000 billion ($24 trillion?). Not gonna happen in our lifetimes.

GOOG may well become the biggest company on Earth, but expecting anything like a 300x gain from here is crazy. A 10x gain from here would make it twice as big as GE. That would be the uppper, uppper end of my expectations if I owned it. And I wouldn't expect that for at least 10 years.

GOOG will soon run into the law of large numbers and it's growth will slow way down. That doesn't mean it's not currently a good investment, but it does mean that you won't see anything like the return investors who held MSFT in 1987 saw. To get a MSFT-1987 like return you should be looking at companies worth less than $1 billion.

[/ QUOTE ]

Excellent point. Welcome to the boards.

[RedManPlus]

I never implied that GOOG...
Has any chance of returning 300x in 20 years.

But if it grows at 15% for 19 years...
It will return 60x.

You missed all the similarities to MSFT...
And nitpicked on something I never said.

Welcome to 2+2...
You'll fit right in...
That's how everybody behaves around here.

Similarities GOOG '05 and MSFT '87

(1) Both difficult to understand tech companies.
Just read this thread.
This is a sophisticated place...
But no one has a clue what GOOG is really about...
Reason: You have to have a computer science degree...
To even begin to understand why GOOG...
*** Technologically ***
Is such a threat to YHOO and MSFT.

(2) Both companies shot out of the box...
And where viewed as insanely overvalued...
After 1 year public.

(3) Both companies have done nothing...
But make money for their investors.

(4) Talent.
GOOG is attracting the talent MSFT was in '87.

The kind of stuff GOOG is building...
World's fastest web-scale supercomputer w/custom OS, etc...
Cannot be done by an army of MicroSerfs.
(It takes MSFT 5 f*cking years...
To foist a bug-ridden Windows upgrade on the world).

You have to hire at 6 figure salaries...
50, 100 whatever top GENIUS level software engineers.

Software Geniuses are a lot like Poker Geniuses...
Born not made... and very quirky...
And in very limited supply.

They don't care about money...
But care about interesting work and non-conformist culture.

In general, a top PhD Computer Genius...
Would never consider working for a MSFT...
But would sign up with GOOG in a heartbeat.

GOOG is actually more comparable to Apple '85.

Anyway...
In terms of talent and technology...
GOOG is gonna roll over MSFT and YHOO.

If you want detail...
Go back and read my posts.

rm+

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[FMThe2nd]

[ QUOTE ]
But if it grows at 15% for 19 years...
It will return 60x.

[/ QUOTE ]

... and if I try real hard, I might be able to excrete a golden egg.

60x growth from here would put GOOG at a $5 trillion market cap. U.S. annual GDP in 2002 (the last year I can find) was around $11 trillion. I think there are some serious flaws in your thinking if you honestly believe that GOOG is going to return 60x from here in 20 years.

Your logic appears to be that since GOOG is a great company less than a year from its IPO that it should experience the same growth that another great company (MSFT) did when it was less than a year from its IPO. What you are failing to take into account is how relatively tiny (in market cap terms) MSFT was when it went public compared to how large GOOG was when it went public.

You should seriously consider looking for some professional money management help because your logical investing flaws will destroy your returns over the long run.

And by the way, I do have a computer science degree, but that has no bearing on my ability, or lack thereof, in understanding GOOG.

[RYL]

[ QUOTE ]
[ QUOTE ]
But if it grows at 15% for 19 years...
It will return 60x.

[/ QUOTE ]

... and if I try real hard, I might be able to excrete a golden egg.

60x growth from here would put GOOG at a $5 trillion market cap. U.S. annual GDP in 2002 (the last year I can find) was around $11 trillion. I think there are some serious flaws in your thinking if you honestly believe that GOOG is going to return 60x from here in 20 years.

Your logic appears to be that since GOOG is a great company less than a year from its IPO that it should experience the same growth that another great company (MSFT) did when it was less than a year from its IPO. What you are failing to take into account is how relatively tiny (in market cap terms) MSFT was when it went public compared to how large GOOG was when it went public.

You should seriously consider looking for some professional money management help because your logical investing flaws will destroy your returns over the long run.

And by the way, I do have a computer science degree, but that has no bearing on my ability, or lack thereof, in understanding GOOG.

[/ QUOTE ]

6 billion people and rate of inflation.

[RYL]

Irrational exuberance can still happen to a single stock. This is happenning in the internet. This is good. Bush will be out of office after 2008. This is just the beggining for google.

[wickedgoodtrader]

I've never traded options... but I think GOOG will be my first one. I will be waiting to get on the PUT side. Of course it's easy for google to go up and up and up because there hasn't been any set backs yet. Just wait till it sets back 10%... everyone is going to start unloading locking in profits.. causing a serious long squeeze. This will combine with all the short money hopping in and selling causing even more of a decline. Everyone keeps saying the $350 number. So what hapopens when it gets there? Only thing I don't like is how expensive a contract is. Kinda tough for me to risk say $2000 on a July $300 put.

[Paluka]

[ QUOTE ]
Only thing I don't like is how expensive a contract is.

[/ QUOTE ]

Well at least you aren't missing any important information! You should seriously be banned from this forum, you could really cause some damage.

[Ulysses]

[ QUOTE ]
In general, a top PhD Computer Genius...
Would never consider working for a MSFT...
But would sign up with GOOG in a heartbeat.

[/ QUOTE ]

While Google is definitely attracting some great technologists, including many from MSFT, your statement is not correct. Top CS people continue to join MSFT for many reasons.

[Ulysses]

Good to see you again, man! Do you have any good stock tips!?

[NotMitch]

[ QUOTE ]
I've never traded options... but I think GOOG will be my first one. I will be waiting to get on the PUT side. Of course it's easy for google to go up and up and up because there hasn't been any set backs yet. Just wait till it sets back 10%... everyone is going to start unloading locking in profits.. causing a serious long squeeze. This will combine with all the short money hopping in and selling causing even more of a decline. Everyone keeps saying the $350 number. So what hapopens when it gets there? Only thing I don't like is how expensive a contract is. Kinda tough for me to risk say $2000 on a July $300 put.

[/ QUOTE ]

Why don't you just write some calls? Thats where the money is.

[Dan Mezick]

Stay on the trend until it is over.

Long term, this usually means a penetration of the 200DMA by 3% or more on a closing basis.

Short term, this usally means a penetration of the 50DMA by 3% or more on a closing basis.

I notice GOOG is in an uptrend according to this definition.

http://stockcharts.com/def/servlet/SC.web?c=GOOG

A very strong and impressive uptrend, actually.

Those who like +EV situations may develop a habit of buying uptrending stocks as they near important areas of support such as the 200-day or 50-day moving averages.

Others types who follow trends like to buy when price breaks out to new all-time highs.

[RYL]

8 minute slideshow. We are entering a new revolution.

The Future of Google (http://mccd.udc.es/orihuela/epic/)

[wildwood]

I vote not to jump on the bandwagon. Here are a few of my reasons why:
1. Most everybody loves google. That's a red flag for me.
2. Perfection seems to be priced in. If the future turns out to be less than perfect, I would expect the stock to develop an air pocket on the downside.
3. Insider selling. Use the google search engine to check this item and item 4.
4. Current stock options outstanding. These represent future dilution of shareholder's equity. I don't know the company's plans for issuing more stock options in the future.
5. I noted in the slideshow praise for amazon. No mention of amazon's stock price drop from over $100 to less than $10 earlier this decade. Jeff Bezos was Time's man of the year at the beginning of this ugly decline.
6. This bull market is long in the tooth.
A few more comments. I don't know what google's stock price will do; that's up to the auction marketplace. Predicting the future is a hazardous undertaking; have a plan if you're wrong. For example, if you're long the stock and it started dropping relentlessly, at what price would you cut your loss? For the purpose of full disclosure, I am not long or short google stock at this time, and I have no connection with the company whatsoever. fwiw

[chardog]

[ QUOTE ]


Software Geniuses are a lot like Poker Geniuses...
Born not made... and very quirky...
And in very limited supply.

They don't care about money...
But care about interesting work and non-conformist culture.

/images/graemlins/cool.gif /images/graemlins/cool.gif /images/graemlins/cool.gif

[/ QUOTE ]

As long as we're pigeonholing people... I picture you driving a blue VW bug with a KerryEdwards04 sticker you haven't had the heart to pry of your back bumper yet...

[RYL]

[ QUOTE ]

I vote not to jump on the bandwagon. Here are a few of my reasons why:
1. Most everybody loves google. That's a red flag for me.
2. Perfection seems to be priced in. If the future turns out to be less than perfect, I would expect the stock to develop an air pocket on the downside.
3. Insider selling. Use the google search engine to check this item and item 4.
4. Current stock options outstanding. These represent future dilution of shareholder's equity. I don't know the company's plans for issuing more stock options in the future.
5. I noted in the slideshow praise for amazon. No mention of amazon's stock price drop from over $100 to less than $10 earlier this decade. Jeff Bezos was Time's man of the year at the beginning of this ugly decline.
6. This bull market is long in the tooth.
A few more comments. I don't know what google's stock price will do; that's up to the auction marketplace. Predicting the future is a hazardous undertaking; have a plan if you're wrong. For example, if you're long the stock and it started dropping relentlessly, at what price would you cut your loss? For the purpose of full disclosure, I am not long or short google stock at this time, and I have no connection with the company whatsoever. fwiw

[/ QUOTE ]

I'm going to start playing golf now.