Invest in Google shares? A fine long term bet?

[JesseFrank]

Millions of people, including you, use them

Why ? Because they are cheap

Why they don't make a profit regardless of the fact they do a roaring trade ? Because they are cheap ( read they sell below their cost price )

How will they turn themselves into a profitable company ? By not selling below their cost price

End result ........ Millions of people, including you, will stop using them.

There is evidence that they are systematically selling below their cost price? And does that also apply to the myriad of traders who use the Amazon platform? Their margins may be low which is not the same thing and capture of market share offsets that looking forwards. You may not buy into the Amazon story through 2014 so you are perfectly entitled to short the stock (many do). However your original point was that they were a bogus stock because they didn't make a profit and we have now disproved that assertion. The bigger picture may be that you are really on a mission to join the conspiracy club team because you have difficulty following stock price movements and are looking for targets to lash out at.

There is evidence that they are systematically selling below their cost price?

How do you explain that they haven't made a single dollar profit in all those years ?

I don't say that they sell the product below the purchase price, but total cost includes many thing like shipping, overheads and so much more.

If their earnings were higher than their total expenses, they would make a profit. Nothing to do with conspiracies.

Edit : Without doubt you remember that prior to the year 2000 many companies related to the internet saw their shareprice rise into heaven, without making a single dollar profit. How many of those companies still exist ?

Edited February 6, 2014 by JesseFrank

[SheungWan]

Millions of people, including you, use them

Why ? Because they are cheap

Why they don't make a profit regardless of the fact they do a roaring trade ? Because they are cheap ( read they sell below their cost price )

How will they turn themselves into a profitable company ? By not selling below their cost price

End result ........ Millions of people, including you, will stop using them.

There is evidence that they are systematically selling below their cost price? And does that also apply to the myriad of traders who use the Amazon platform? Their margins may be low which is not the same thing and capture of market share offsets that looking forwards. You may not buy into the Amazon story through 2014 so you are perfectly entitled to short the stock (many do). However your original point was that they were a bogus stock because they didn't make a profit and we have now disproved that assertion. The bigger picture may be that you are really on a mission to join the conspiracy club team because you have difficulty following stock price movements and are looking for targets to lash out at.

There is evidence that they are systematically selling below their cost price?

How do you explain that they haven't made a single dollar profit in all those years ?

I don't say that they sell the product below the purchase price, but total cost includes many thing like shipping, overheads and so much more.

If their earnings were higher than their total expenses, they would make a profit. Nothing to do with conspiracies.

Edit : Without doubt you remember that prior to the year 2000 many companies related to the internet saw their shareprice rise into heaven, without making a single dollar profit. How many of those companies still exist ?

The technology bust of 2000 is a risk background to bear in mind. The reason Amazon hasn't made a bottom-line profit is because of the growth dynamic. I explained that above. You are perfectly entitled to question that strategy if you consider it flawed. The market for now considers the strategy positively. Take the other side of the trade. You just buy puts.

[JesseFrank]

Millions of people, including you, use them

Why ? Because they are cheap

Why they don't make a profit regardless of the fact they do a roaring trade ? Because they are cheap ( read they sell below their cost price )

How will they turn themselves into a profitable company ? By not selling below their cost price

End result ........ Millions of people, including you, will stop using them.

There is evidence that they are systematically selling below their cost price? And does that also apply to the myriad of traders who use the Amazon platform? Their margins may be low which is not the same thing and capture of market share offsets that looking forwards. You may not buy into the Amazon story through 2014 so you are perfectly entitled to short the stock (many do). However your original point was that they were a bogus stock because they didn't make a profit and we have now disproved that assertion. The bigger picture may be that you are really on a mission to join the conspiracy club team because you have difficulty following stock price movements and are looking for targets to lash out at.

There is evidence that they are systematically selling below their cost price?

How do you explain that they haven't made a single dollar profit in all those years ?

I don't say that they sell the product below the purchase price, but total cost includes many thing like shipping, overheads and so much more.

If their earnings were higher than their total expenses, they would make a profit. Nothing to do with conspiracies.

Edit : Without doubt you remember that prior to the year 2000 many companies related to the internet saw their shareprice rise into heaven, without making a single dollar profit. How many of those companies still exist ?

The technology bust of 2000 is a risk background to bear in mind. The reason Amazon hasn't made a bottom-line profit is because of the growth dynamic. I explained that above. You are perfectly entitled to question that strategy if you consider it flawed. The market for now considers the strategy positively. Take the other side of the trade. You just buy puts.

Could do, the dirty trick about it is however, as I already said in another thread, that stock prices get manipulated these days .

No stock price reflects real earnings anymore. A select few big players decide the stock price of many companies, and the numerous recent convictions and settlement agreements of hedge fund mangers and big investment bank ceo's proofs this over and over again.

[SheungWan]

Could do, the dirty trick about it is however, as I already said in another thread, that stock prices get manipulated these days .

No stock price reflects real earnings anymore. A select few big players decide the stock price of many companies, and the numerous recent convictions and settlement agreements of hedge fund mangers and big investment bank ceo's proofs this over and over again.

If you think that is the case for all stocks across all sectors then just stay out and maybe just focus on bonds.

[JesseFrank]

Could do, the dirty trick about it is however, as I already said in another thread, that stock prices get manipulated these days .

No stock price reflects real earnings anymore. A select few big players decide the stock price of many companies, and the numerous recent convictions and settlement agreements of hedge fund mangers and big investment bank ceo's proofs this over and over again.

If you think that is the case for all stocks across all sectors then just stay out and maybe just focus on bonds.

It isn't the case for ALL stocks, the smaller companies will still escape that trend, but they are also difficult to discover and research for an average investor and by the time they come to the attention, the big fishes have their hands in them already.

That is probably also the only reason why they come in the eyesight of the smaller investor .

[SheungWan]

Could do, the dirty trick about it is however, as I already said in another thread, that stock prices get manipulated these days .

No stock price reflects real earnings anymore. A select few big players decide the stock price of many companies, and the numerous recent convictions and settlement agreements of hedge fund mangers and big investment bank ceo's proofs this over and over again.

If you think that is the case for all stocks across all sectors then just stay out and maybe just focus on bonds.

It isn't the case for ALL stocks, the smaller companies will still escape that trend, but they are also difficult to discover and research for an average investor and by the time they come to the attention, the big fishes have their hands in them already.

That is probably also the only reason why they come in the eyesight of the smaller investor .

Smaller stocks have less liquidity and are more subject to being whipsawed by larger players buying in or liquidating their positions. The risk/reward is potentially higher. You may have bought into an underlying more volatile market which didn't appear that way to you for a long period. And then it did. Instead of whingeing on about the 'big fish', move on and do something else if you have been spooked.

Edited February 7, 2014 by SheungWan

[Dannyboy6]

I've heard Google is gonna Split Alril 2, I read it here in San Francisco...

[Suradit69]

You should watch some Fast Money shows on CNBC... this time of the year they come on at 11:00 in the morning in Thailand. They're always going on and on about GOOG and YHOO, Baidu, etc . I usually tune out because stocks like that are too volatile & speculative for my tastes ... although I do have some DDD (3-D printing) which is all the volatility I need. I know today they were talking about this headline:

Google Gives $100 Million Award to Outgoing CEO

Nice work if you can get it.

If you look through here, you might find another clip or two where they talk about GOOG ... just for some other input to consider http://video.cnbc.com/gallery/?video=3000242610

S&P has a hold on the stock with a $1300 target. Mornngstar gives it a 2 star rating out of 5.

ä 01/31/14 11:38 am ET ... S&P CAPITAL IQ REITERATES

HOLD OPINION ON SHARES OF

GOOGLE (GOOG 1175.8***):We are raising our

12-month target price to $1,300 from $1,050, on

revised DCF analysis.We are trimming our EPS

estimates for '14 to $40.74 from $42.46 and '15's

to $46.12 from $47.18.We calculate that including

the impact of stock-based compensation

GOOG posts Q4 EPS of $10.09, vs. $8.68, below

our forecast of $10.64, reflecting Motorola results

that were worse than we projected. Our

forecasts include Motorola despite GOOG's announced

plans for a pending sale. GOOG's

board also approved a long-awaited 2-for-1

stock split it expects to be executed in about

two months. /S. Kessler

I do have some DDD (3-D printing) which is all the volatility I

How's that for timing. I mention my DDD holding and minutes later it opens down about $20 a share.

Wow DDD is one of my favourites

Yes, after Citron's short attack I closed out my short position in covered calls at a profit and now, after the Hasbro announcement it's back in the upper $70's. I wrote covered calls again. Volatility can be scary, but also profitable.

Also got into PRLB and have written covered calls, redeemed them when the price slid and wrote again after recovery ... once again using the volatility to my advantage.

Just about everything else I own is pretty staid and income oriented. I like Eaton Vance CEFs that use an option writing strategy. ETY. ETv, ETB have generated nice monthly income and, because they were selling at major discounts to NAV, Eaton has been buying back shares which has reduced the discount. Also bought VTR, TWO, ARCP, BTE and LNCO when they were down because of short attacks or market nerves or fear of tapering. Nice income, money from covered calls and capital gains. Got out of VTR after a nice run up.

... but always have to remember that what goes up quickly can go down even faster.

[Suradit69]

There is evidence that they are systematically selling below their cost price? And does that also apply to the myriad of traders who use the Amazon platform? Their margins may be low which is not the same thing and capture of market share offsets that looking forwards. You may not buy into the Amazon story through 2014 so you are perfectly entitled to short the stock (many do). However your original point was that they were a bogus stock because they didn't make a profit and we have now disproved that assertion. The bigger picture may be that you are really on a mission to join the conspiracy club team because you have difficulty following stock price movements and are looking for targets to lash out at.

There is evidence that they are systematically selling below their cost price?

How do you explain that they haven't made a single dollar profit in all those years ?

I don't say that they sell the product below the purchase price, but total cost includes many thing like shipping, overheads and so much more.

If their earnings were higher than their total expenses, they would make a profit. Nothing to do with conspiracies.

Edit : Without doubt you remember that prior to the year 2000 many companies related to the internet saw their shareprice rise into heaven, without making a single dollar profit. How many of those companies still exist ?

The technology bust of 2000 is a risk background to bear in mind. The reason Amazon hasn't made a bottom-line profit is because of the growth dynamic. I explained that above. You are perfectly entitled to question that strategy if you consider it flawed. The market for now considers the strategy positively. Take the other side of the trade. You just buy puts.

Could do, the dirty trick about it is however, as I already said in another thread, that stock prices get manipulated these days .

No stock price reflects real earnings anymore. A select few big players decide the stock price of many companies, and the numerous recent convictions and settlement agreements of hedge fund mangers and big investment bank ceo's proofs this over and over again.

" that stock prices get manipulated these days ."

If you lose money, it's because of manipulation. If you make money, it's because of your investment prowess.

The market is what the market is. You watch for short attacks that make no sense and buy in before all the shorts decide to cover. If something is inflated, sell calls or buy puts. There are always ways to make or lose money. If it's all too overwhelming, then buy into an ETF, CEF or mutual fund and let someone else manage your money.

I'm not all that bright, but I'm generating a nice income and have made some nice capital gains since the Bush-Cheney Recession. You have to spend a lot of time reading and researching and getting a feel for the psychology behind price movements of individual stocks. If you can't explain why you want to buy a certain stock in detail, then you're just gambling. Either way you might win or lose or stand on the sidelines whining about the referee. We all do each of these some of the time, but blaming others for your failures is not a winning strategy.

If you're too busy finding excuses for why you're losing, you'll never win.

Edited February 19, 2014 by Suradit69

[MilesofSmiles]

I think google is a good bet for the next 5 years.

Google, Amazon, Microsoft, Apple are all strong long term bets.

Their product is advertising, fed by search, and between web search, android handsets, the chrome browser, and google analytics etc etc.

Their traffic, data and the advertising platform is second to none.

Yandex & Bing (which now powers yahoo) are credible competitors to google for search, Baidu to a lesser extent.

However, to put that into perspective.....

Google represent of 30% worldwide, digital ad spend.

Worldwide search share varies from 40-60%, many markets it's 90% up.

• http://venturebeat.com/2013/06/13/google-facebook-70-of-all-mobile-ad-revenues-worldwide/

Bear in mind that Search is an industry ripe for disruption, and much like Google took over from Altavista, Hotbot and Yahoo, it will probably happen again one day.

Diversifying away from relying (90%) on the traffic from search to their ads is what to watch for.

Amazon did this exact thing, a very long time ago, and now they are THE big player in corporate cloud computing.
They make a lot of money, and much of it goes straight back into building the company for the future. They did lose money for 8 years (to the point it was a running joke online, and big news when they finally made some), but since then have been very profitable since.

• http://www.theregister.co.uk/2013/03/13/amazon_has_a_third_of_global_iaas_spend/
• http://www.forbes.com/sites/stevefaktor/2013/05/23/featuredeconstructing-googlersquos-strategy-will-google-eat-your-business-next/

Google Apps and their enterprise products are currently (somewhat) immature, but the way things are going, this will be a very different situation in 5 years. I have clients whose business I have moved completely to using the google cloud platform, it's very good, however the value & power is in the platform itself and the marketplace supporting it... much like what amazon did. Same again with them getting into the ISP market.

MS is not given the credit they deserve for what they've done with Windows8, Bing (& Adcenter), Azure, Office365 /consumer cloud platforms.

I'm of the personal opinion that Google won't be revolutionizing any again markets like they did with search again. They've made some very very smart acquisitions (Android), clearly know what they're doing, and will be strong for a long while yet.

[ExpatJ]

I met an american lady who works for google this week in Bangkok- v.v. intelligent and bright. Google can attract and keep the smartest people out there- and im not talking IT geeks. She and mmany google staff are just generalists (she graduated in creative writing) but with hefty IQs and people skills.

My point is that investing in a company that can attract and recruit the smartest people in society is probably a good bet.

[Naam]

I met an american lady who works for google this week in Bangkok- v.v. intelligent and bright. Google can attract and keep the smartest people out there- and im not talking IT geeks. She and mmany google staff are just generalists (she graduated in creative writing) but with hefty IQs and people skills.

My point is that investing in a company that can attract and recruit the smartest people in society is probably a good bet.

a contrarian view is that investing in a company which does not have tangible assets is probably not such a good bet.

many investors seem to have forgotten the "dot.com" debacle of 2000.

disclaimer: my view is neither negative nor positive, just stating a fact.

[Lancelot]

Wish I could forget the Dot.Com debacle...

[SheungWan]

Wish I could forget the Dot.Com debacle...

If the markets have spooked you then stay out if you continue to feel uncomfortable.

[advancebooking]

I think google is a good bet for the next 5 years.

Google, Amazon, Microsoft, Apple are all strong long term bets.

Their product is advertising, fed by search, and between web search, android handsets, the chrome browser, and google analytics etc etc.

Their traffic, data and the advertising platform is second to none.

Yandex & Bing (which now powers yahoo) are credible competitors to google for search, Baidu to a lesser extent.

However, to put that into perspective.....

Google represent of 30% worldwide, digital ad spend.

Worldwide search share varies from 40-60%, many markets it's 90% up.

• http://venturebeat.com/2013/06/13/google-facebook-70-of-all-mobile-ad-revenues-worldwide/

Bear in mind that Search is an industry ripe for disruption, and much like Google took over from Altavista, Hotbot and Yahoo, it will probably happen again one day.

Diversifying away from relying (90%) on the traffic from search to their ads is what to watch for.

Amazon did this exact thing, a very long time ago, and now they are THE big player in corporate cloud computing.

They make a lot of money, and much of it goes straight back into building the company for the future. They did lose money for 8 years (to the point it was a running joke online, and big news when they finally made some), but since then have been very profitable since.

• http://www.theregister.co.uk/2013/03/13/amazon_has_a_third_of_global_iaas_spend/
• http://www.forbes.com/sites/stevefaktor/2013/05/23/featuredeconstructing-googlersquos-strategy-will-google-eat-your-business-next/

Google Apps and their enterprise products are currently (somewhat) immature, but the way things are going, this will be a very different situation in 5 years. I have clients whose business I have moved completely to using the google cloud platform, it's very good, however the value & power is in the platform itself and the marketplace supporting it... much like what amazon did. Same again with them getting into the ISP market.

MS is not given the credit they deserve for what they've done with Windows8, Bing (& Adcenter), Azure, Office365 /consumer cloud platforms.

I'm of the personal opinion that Google won't be revolutionizing any again markets like they did with search again. They've made some very very smart acquisitions (Android), clearly know what they're doing, and will be strong for a long while yet.

with all that said, what do you think will happen to the share price in the future??

[DividendGuy]

You need to understand what type of investment you are trying to achieve and then go for that type after studying what approach is best for you instead of asking for stock opinions.I personally go for dividend producing equities and have been happy with that approach since my investing started. However, there is nothing wrong with value,growth or the other more intensive types of investing.As long as you understand/know what you are doing and are going in the direction you feel that is right for you, then it is your call, but be forewarned, know what type of long-term investing you are looking for and study it until you know it forwards and backwards.If you don't know how to do your own research, then I am afraid you are going to be at a loss every time you want to buy equities.Go to the SET library on the weekends and study.

[lomatopo]

Its exact weighting in Google shares is 6.9%

You could just buy between $ 1,380 and $ 3,450 worth of GOOG?

Given that it split 2:1 this week, and is $516, you could buy 3 ~ 7 shares.

A lot of tech-oriented large-cap/growth mutual funds hold GOOG in their top 5, many as their top holding by %, although maybe not as high as 9.6%?

Unless there is some hugely disruptive technology on the horizon - like beaming adverts directly to the brain, they should continue to well for the foreseeable future?

[fletchsmile]

The share split is mainly cosmetic although it does make it a bit easier to adminstrate for small shareholders - similar to Apple if they go ahead. Apple pays a 2% div, so unless you own 50 shares (USD 28k) you dont get to reinvest your divs. Even for a $50k holding you can't necessarily nicely re-invest your div if you want to as you get enough to buy 1 more share but not enough for 2.

I like GOOG, and think it's a good long term bet. For me though on GOOG the price isn't the right level, and I've been waiting for a pullback.

That said I've been waiting quite some time. I bought in 1Q 2012 around 570 and sold Apr 2013 for around 820 for a nice profit, expecting to be able to re-enter. That hasn't proved the case though - one year later!

Current P/E is over 20 and forecast P/E just under 20. Doesn't pay a dividend either. I appreciate people rate tech stocks on higher multiples and don't expect divs, but then again I remember the dot.com bust, I also remember what happened in Thailand with P/Es above 20 and we've seen how even Apple can fall from grace in the eyes of many.

In addition I think the US market generally is overvalued on almost any metric you care to mention. If a large pullback happens there GOOG won't be unscathed. So I'm just not prepared to buy in at these levels, and am prepared to accept I may continue to miss out. That said I can't grumble at how 2012/13 went..

Cheers

Fletch

Edited April 28, 2014 by fletchsmile