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GOOG = SILLY
Old 11-17-2005, 06:19 PM   #1
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GOOG = SILLY

So Google tops $400/share today, and everyone is in love with it.

It's P/E is ~90. 90!!! WTF

Can anyone tell me why this doesn't prove people are idiots? 5 years after the dot-com craze and people think this time it's different? Anybody own Google? Going to sell soon? Think there is still upside?
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Re: GOOG = SILLY
Old 11-17-2005, 06:24 PM   #2
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Re: GOOG = SILLY

The dot-coms with real earnings did pretty well, even in the long run.

Personally, I don't think google can sustain their revenue growth, but they have hired a lot of smart people....
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Re: GOOG = SILLY
Old 11-17-2005, 07:04 PM   #3
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Re: GOOG = SILLY

I think it still has a shot at $500+, although I'm too scared to own it. When they put it in the S & P it should get a good bump up. At some point they will miss earnings and it will get cut in half overnight. That may be the day I take up short selling, although I won't step away from the keyboard while I'm short.
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Re: GOOG = SILLY
Old 11-17-2005, 07:06 PM   #4
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Re: GOOG = SILLY

Quote:
Originally Posted by Laurence
. . .Can anyone tell me why this doesn't prove people are idiots?* . . .
I wasn't aware we needed further proof. *
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Re: GOOG = SILLY
Old 11-17-2005, 07:47 PM   #5
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Re: GOOG = SILLY

Seems about time to buy a PUT or two.........
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Re: GOOG = SILLY
Old 11-17-2005, 09:01 PM   #6
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Re: GOOG = SILLY

Laurence, do you understand how Google makes money? It practically prints its own dollar bills. It is all-pervasive. It is all-controlling. That's why it's so valuable.

Here's a glimpse into the inner workings. Almost every consumer who logins to the internet to shop or find out something does a google search. Google returns "hits" in the order that folks pay them to place them. So my company uses Google. We pay google 5 cents or 3 cents or whatever so that when someone searches for "widgets" or related keywords, then our company appears in the list near the top. Everytime someone clicks through to our website, google bills us. We buy a whole collection of related keywords. Google knows which keywords that consumer use the most and charges more for those keywords.

In essence, google collects taxes on all internet commerce and searching. It's a very small tax, but it's there. In fact, many companies are afraid of google. After all, it controls a big fraction of what people will see on the internet. Folks search, google presents. If google decides to blacklist a company and never put up that company's website in a search, that company is screwed.

Suppose google builds a local yellow pages online phone book. Imagine how useful that would be. Imagine how much local companies would pay to be placed near the top of the search list. Imagine that the companies only had to pay a dime for each click through. They would think it was cheap. Google would clean up.

Full disclosure: I do not own Google, nor do I own Yahoo.
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Re: GOOG = SILLY
Old 11-17-2005, 09:14 PM   #7
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Re: GOOG = SILLY

Well they are making money but to have market cap superior to Dell or HP? WOW...lots of greed in this one...
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Re: GOOG = SILLY
Old 11-17-2005, 09:38 PM   #8
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Re: GOOG = SILLY

it's only a question of time when it tumbles.
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Re: GOOG = SILLY
Old 11-17-2005, 10:02 PM   #9
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Re: GOOG = SILLY

Don't forget -- MSFT's market cap is $297B.* *Last I heard, all they do is write bits to little plastic discs.* *Is it really that much different than the bits google distributes from their servers?

(Hint: Microsoft doesn't think so.)
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Re: GOOG = SILLY
Old 11-17-2005, 10:17 PM   #10
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Re: GOOG = SILLY

I'm one of the last people anyone should glean stock knowledge from, but I think the barrier to entry for Google competitors is lower that that for MS competitors.

Then again Google is so pervasive it may be hard to wrest away market share. I've gotten to where I'll type company names into Google even if I'm relatively sure I know the URL. I almost never click on their ads, though.
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Re: GOOG = SILLY
Old 11-17-2005, 10:38 PM   #11
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Re: GOOG = SILLY

I agree it's a good business, but thing of how long it will have to sustain earnings growth to justify $400 a share....somebody is going to come up with a distributive processing, peer to peer, kazaa like search engine which runs a little piece on everyone's pc and kicks butt and offer it as freeware, then google will go down AOL style.
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Re: GOOG = SILLY
Old 11-18-2005, 07:03 AM   #12
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Re: GOOG = SILLY

I wouldn't touch that thing with someone else's 10 foot pole. Sure looks absurdly overvalued to me. Having said that, I deliberately avoid tech because I am well aware that I don't sufficiently understand the markets or economics.
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Re: GOOG = SILLY
Old 11-18-2005, 09:43 AM   #13
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Re: GOOG = SILLY

I really question a company that spits out a lot of cash flow yet still reserves the right to issue seasonal offerings for more cash. Supposedly it is absolutely needed and GOOG can't pursue its growth strategy from the CF from current operations + very little debt. Questionable. IMHO fits into the research suggesting companies issue more stock when the valuation is high and supposedly buy it back when its low. No thanks.
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Re: GOOG = SILLY
Old 11-18-2005, 09:49 AM   #14
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Re: GOOG = SILLY

I took a chance and bought 12 shares of Google back on February 14. Paid $185.95 per share. I figured I'd take a chance. So now, at around $404 per share, I'm not complaining. I've thought about cashing it in while it's riding so high, but it's not like the ~$2200 I invested is going to sink me if I lose it. So I think I'll just hang onto it and see where it goes.
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Re: GOOG = SILLY
Old 11-18-2005, 10:06 AM   #15
 
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Re: GOOG = SILLY

Google is all-pervasive now, but things can happen so quickly in this business. I remember when the search engine everyone used was InfoSeek. Google zapped them overnight.

Some other all-pervasive things of the past:

Netscape
Visicalc
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Re: GOOG = SILLY
Old 11-18-2005, 10:10 AM   #16
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Re: GOOG = SILLY

Quote:
Originally Posted by Andre1969
I took a chance and bought 12 shares of Google back on February 14.* Paid $185.95 per share.* I figured I'd take a chance.* So now, at around $404 per share, I'm not complaining.* I've thought about cashing it in while it's riding so high, but it's not like the ~$2200 I invested is going to sink me if I lose it.* So I think I'll just hang onto it and see where it goes.
Sell half....keep half in play. Find a new toy for the first half and don't get too attached to the second half. You could come out a big winner but until you sell it is just a number you can't spend.
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Re: GOOG = SILLY
Old 11-18-2005, 10:27 AM   #17
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Re: GOOG = SILLY

does yahoo uses google's engine? bc i only use yahoo, maybe im old-fashioned
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Re: GOOG = SILLY
Old 11-18-2005, 10:48 AM   #18
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Re: GOOG = SILLY

Quote:
Originally Posted by TromboneAl
Google is all-pervasive now, but things can happen so quickly in this business.* I remember when the search engine everyone used was InfoSeek.* Google zapped them overnight.

Some other all-pervasive things of the past:

Netscape
Visicalc
You forgot about WordPerfect 5.1.
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Re: GOOG = SILLY
Old 11-18-2005, 10:58 AM   #19
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Re: GOOG = SILLY

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So Google tops $400/share today, and everyone is in love with it.

It's P/E is ~90.* 90!!!* WTF
1.* Share price, in and of itself, is meaningless.* *# of shares outstanding x price per share = market capitalization of the company.* *If they did a 8 for 1 split (which would change essentially nothing but the # of shares outstanding and the share price), which would make the share price $50 dollars, would you think its all of a sudden somehow less expensive?

2.* That they even have a P/E puts them ahead of 1000s of other companies.* How many years did amazon boom without even having a P/E?* (you can't divide something by a negative number aka with negative earnings).*

Back in the internet boom, most of them had no earnings.* *They had revenue maybe, but expenses far outweight income for most.

> Smaller companies tend to have lower share prices, but that's not a hard and fast rule.* *You could make a share price whatever you wanted to make it, and just compensate for that by making the # of shares outstanding lower (or higher).
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Re: GOOG = SILLY
Old 11-18-2005, 11:11 AM   #20
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Re: GOOG = SILLY

That's why my emphasis was on P/E, not share price. Nobody is calling Bekshire Hathaway "A" stock a bubble stock here.

So how many shares will you be buying at this price?
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