Google's stock takes a dump

Originally Posted by ur my bitch

who cares if that one article agreed with you? The article also states that $285 for Google is way over valued. Yet, 6 months AFTER that was written, Google is $200 higher.

My point of posting is that I bring points, and you discredit them by claiming I don't know what I'm talking about, when people at the Journal are saying the exact same thing. I think Google is overvalued - for many different reasons, many of which I have provided solid backing for. You must realize that overvalued != a bad company. But just recently, the CFO admitted that Google won't be able to maintain 35% revenue gains (which the current prices were based upon) and this was before analysts day (a strange time to release financial data). In my humble opinion, many internet speculators - such as yourself- have forgotten to properly value the riskiness of a firm. Google has 1 proven source of revenue, and even this is not 100% guaranteed in the future. No company is guaranteed to exist in the future, but Google is especially a risky case as it has no real product, yet. Google could be the most promising company in the world, but the circumstances of it are already beginning to crumble. And I believe that it will be brought back to Earth.

Fuck, I use Google every day, and I see "Google" being used as a verb, this doesn't change the fact that their future is tenuous at best. You must apply a much harsher discount rate to Google than say a traditional Financial Company or Manufacturing Conglomerate.

edit: this post was covered up:

but there are more people thining Google is going to the mid $400's than $200's

The ratio is actually 3 to 1 in favor of Google's price reaching 250 before 500.

http://discussions.wsj.com/n/mb/view...ote=0&msg=3821

Which level will Google's stock, which closed around $363 on Tuesday, cross first?

$250 3237 votes (73%)
$500 1174 votes (27%)


4411 people have voted so far

[ur my bitch]

again, you are relying on a WSJ article or survery, which means basically NOTHING. When I say the majority are leaning towards a $450 Google rather than a$200 Google, I mean the majoritfy of the street. The ANALYSTS who cover Google.

There are 41 analysts who cover Google. 41 different firms that issue EPS estimates, price target estimates and so on. The majority are leaning towards a $450 stock.

Your survery could have been done on nubblies and if the majoriy of nubblies felt Google would be going to $200, you could say that most people think Gogle is going lower. But, that wouldn't really mean shit now would it? Again, you are a smart guy, but your view is academic and it sounds like you spedn a lot of time repeating what you have been told and not what you may actually have knowledge about.

FYI: Current price targets by different brokers:

475
420
550
520
490
500
450
540
310
513
550
477
550
450
400
440
540
500
600
500
435
490
445.24
550
425
455

These targets have been issued by different brokers. The date ranges from 11/1/05 - 2/2/06. Not super up to date, but still it reflects the majority of thoghts on the street. these are 12 month targets.

[ur my bitch]

you can go to Yahoo message boards on any stock and see what people say about each stock. the majority are idiots and have no clue. They were saying EQIXX was too expensive at $26. I bought more at $31. It's now at $52.10

You really don't seem to be getting my point.

I know what I'm talking about and some knowledgeable people are agreeing with me.

[ur my bitch]

I do get your point, I just think it's a bit limited and I think you're getting most of your arguemnets form reading the WSJ or from something your finance professor said....like dividend theories, etc.

You make some good points and you are right in a bunch of hwat you say. However, these "knowledgable" peoiple are either shortsighted, or they are not as knowledgable as you think. There is so much more to a stock and how it trades than what you are pointing out. I'm only trying to educate you on the more in depth details of stock analysis.

Your "stock analysis" consists of momentum and that's it. You ride analysts oppinions.

"In Depth" blah blah blah.

And the dividend talk isn't really related to google at all, that was a side note.

[ur my bitch]

your dividend talk is what started this whole dragged out debate.

Momentum is what happened to Google the other day when the stock dropped on the CFO's comments. Profit taking and a momentum dip.

I don't ride analysts opinions, but I do take seriously what the "buy-side" says. The buy-side moves the markets. Also, EVERYONE has no choice but to look at what teh sell side analysts say, because their reports move markets and some of the sell side analysts are very good....a majority suck, but some are solid and know what they are talking about. You have to take everything with a grain of salt. But, you have to know what consensus is, you have to be able to run your own models and do your own diligence to determine where a comapny will report as compared to consensus (the buy side analysts do this all day long, talking to CEO's, suppliers, customers, etc) and you need to listen to what the analysts are saying. That is just the fact of the stock market. You may not like it, and you may have text bnook theories of how a company should look and what they should return, but there are so many other factors. You just need to have an open mind.

I don't get it, are you looking at a stock to hold for 20 yrs, or are you looking at the standpoint of making money on a stock? IF you are looking to buy and hold forever, then defintiely look at a boring large cap that moves behind the S&P....or better yet, buy a mutual fund. Momentum is where everyone makes money. You need to look at every stock with an entry point and exit point and you have to have a basis of what point it is right to take profits and when you will have upside (or a drop in price for shorts).

My opinion comes from 6 yrs as a trader and 3 yrs as a buy-side specialist selling portfolio analytics, data feeds for quant. models and market data....tools to help the buy-side make money.

Buy and hold or invest to make a quick buck... it doesn't make a difference. I think Google is fundamentally weak. That is all. It's pretty simple actually, the more risky a company, the harsher discount whatever it is you are valuing to get a stock price. Google has at it's very heart a risk to lose everything in the quick pace of internet advertising/searching services. And even if they don't lose it all, they risk loosing a much more substantial portion than many companies.

And stop criticizing me for being in school, despite what you say I havn't once applied outdated theory to Google. The dividend argument was actually an example of the markets being out of touch with stock price, and it was a misunderstanding. I know that hedges are the ones who drive the markets today, but I also know that hedges might not be around for a while (regulation is just around the corner - hedge funds no longer operate as the once did, nothing even close, but this is a different story all together) and I know that knowing market swings and momentum will earn you money. But when I say Google is overvalued, I mean that it's overvalued. I don't mean you wont make money on it because the market is pushing it up. You seem to believe that when you make money on a stock that it was a good investment, but there are countless factors that aren't accounted for in hindsight. If you ever used the portfolio software that you sold, you would know that the real value of a portfolio is the Risk/Reward Ratio (Beta - or some equivelant), you should know about diversification, liquidity risks, inflation risks, risks risks risks.

I now see that you are arguing that Google may still be a good buy, and perhaps I could agree with you, I think the markets are out of touch with intrinsic values (and Warren Buffet agrees with me - or rather I agree with him). You could make money on google, but it's still overvalued.

[theMerciless1]

Who's buying NYX today?
I thought about it but dont have enough $ to make it worthwhile.

its up over $10 in only 1.5 hours of trading

I think it's a good investment.

The NYSE is here to stay for real, all the talk about Nasdaq, Nasdaq, blah blah blah, when you look at actual TAQ data, NYSE has lower spreads and higher volumes.

[ur my bitch]

did you hear the one about the shitty stock that is priced way too hi????

Well, it is now an S&P 500 stock. Oh and it was up 11% in after market trading today at $370.

Watch for a sell off in the S&P tomorrow.

[Mr. Blonde]

DJ FC is smart.

[f3lix]

Sounds like we need an OST

You're so fucking thick headed I don't know how anybody ever let you become a bond trader.

I like google, I use it everyday. It's a great company. But it's also a very, very risky one. A company with a single source of revenue, which will now grow at about half of what analysts initially believed, in an environment of here today gone tomorrow, warrents a hefty discount factor.

Also: that 11% increase is pure supply and demand. Funds that track S&P now are forced to purchase Google stock.

[ur my bitch]

LOL. BEcause I understand the markets, and I was able to let go of what my professors and text books tell me in order to evaluate things with a real world perspective.

You are correct about the S&P and forced GOOG purchases. Oh, did you happen to look at the GOOG price lately? $404. Closer to the $500 crossover point you were referencing.

Oh, and since I am hard headed and don't know what I am talking about....have you seen EQIX lately? You know, the stock I've been talking about since it wasw trading in the $30's? I sold it 2 weeks ago at $62.98. Not too shabby for a guy who has no clue. Oh, wasn't I saying to buy TWTC sine it was about $7? It's at $17.39 as I type this.

[Deadly Crescent Kick]

lol.

i reposted the article and haven't looked at this. look what i've created LOLz

Oh, and while nubblies was down Google announced another stock offering with no specific use for the cash.

[ur my bitch]

FYI, GOOG revenues are 200% greater than the revenues for its Industry (Internet Software & Services).

GOOG earnings are 210% or the earnings for its Industry.


just in case you give a shit about revenue and earnings growth. Using a BASELINE of 0%, GOOG Revenue is at 48% of the baseline and Earnings are at 44% above the baseline.

[ur my bitch]

EPS (Latest 12 months) is up 222%, latest quarter up 67%

xoxoxo

[ur my bitch]

Originally Posted by DJ FC

If you ever used the portfolio software that you sold, you would know that the real value of a portfolio is the Risk/Reward Ratio (Beta - or some equivelant), you should know about diversification, liquidity risks, inflation risks, risks risks risks.

Well, fortunately for me I do use what I sell, and I use it all the time. Without it, I would have never bought EQIX in the 30's and sold at $62.98 (now it's a $57 stock). I alsoowouldn't have bought TWTC and made a 172% gain in my first outing and already made $1 per share in a day again. I also wouldn't have bought NFI at $28, and it yields 15%, and now it is trading at $33. I also went long in a sweet little pharma company today which has big potential.

See, you still reading your books and looking at Beta, whihc is good, Beta needs to be measured. But, the true measure of a good PM and what EVERY PM is searching for is Alpha. The % that they beat their benchmark. ;-)

I am an ALPHA male lmao

Another thing you should read up on, especially when trying to evaluate tech companies is ENTERPRISE VALUE. I'm sure your text books don't cover that and I doubt you'd even know where to look to find it, but it is a key measure for tech companies. Also, ratios like EV/EBITDA. Or, you can look at time lagged EPS on the same chart as current EPS to look for true growth, or earnigs that tend to fizzle. But then again, that's just me, the heard head who doesn't know as much as college boy.

[Ugly Bastard]

Wow! I don't know much about the market, but after reading this thread it sure did seem like ur my bitch was pwning FC's over-confident "I'm a genius 'cause I go to college" attitude and predictions.

My statements have nothing to do with me being in college. But it's certainly easy to say that to a college kid isn't it?

I just don't think a company as risky as google (fundamentally risky... not risky as in volatile) can warrant a PE greater than 80. We disagree, tough shit.

If anything, Ur is the one being the more naive one... he cant see past ratios and numbers. But I guess that's how they trade on the Street these days... just remember that 'great companies' (like Enron) can beat analysts estimates and generate beautiful numbers, but if your core business stinks you are doomed to fail.

Edit: oh, and UB if you'll read you'll find that what I've been talking about this whole time is intrinsic value, whereas Ur is talking about the return of the stock. A stock can be in a funk (which I believe google is) and loose touch with its intrinsic value.

[Ugly Bastard]

Originally Posted by DJ FC

oh, and UB if you'll read you'll find that what I've been talking about this whole time is intrinsic value, whereas Ur is talking about the return of the stock. A stock can be in a funk (which I believe google is) and loose touch with its intrinsic value.

OBV!

[ur my bitch]

FC is talking about buying and holding for years and years...for intrinsic value. Man, I'm just simply talking about MAKING $$$$. Isn't that what the stock market is all about, isn't it why people invest? Return on Investment, buy low, sell high???????

Just to look at GOOG against its sub industry peers (sub industry is pretty granular)

sales /share Gross income/share EBIT/sh EPS Book Value/sh
Yahoo 3.54 2.32 n/a 1.28 5.78
Verisign 6.08 4.49 0.94 0.53 8.32
EBAY 3.27 2.86 1.11 0.78 6.92
Earthlink 9.22 6.79 n/a 1.02 3.99
GOOG 21.03 13.23 7.34 5.02 32.14
CMGI 2.21 0.27 0.02 0.06 n/a

GOOG is head and shoulders above its peers

Oh, BTW, the Forward P/E is only 46, 1/2 of the current P/E at the current $404 price. Not to bad. The median price target is $483.

[ur my bitch]

fuck, it didn't format properly.