Today we heard words from YHOO: the slow down in economy hit its business in a big way. Financials and auto ads are down more than expected.
Yet, bulls disputed it attributed it to YHOO specific. But in the world like today, nothing is isolated. The weakness in YHOO ads is direct reflection of how this economy is doing overall: Housing market drives down financial ads and auto ads. In good times, when housing was on the boom, mortgage business was booming, everyone was buying new SUVs, HDTVs........... now all cools down because no longer did people have their free ATMs in their houses.
GOOG is not in Mars. It is in the Earth. No one can defy the gravity.
I am in alignment with your statments as well.. However, GOOG is a Wall Street baby! They will cuddle it and care for it as long as to keep trader interest in it. Once a significant decline occurs and volumes disipate the MM will loose a very significant revunue generator. I should know... because it always seems when I am up big, I'll loose bigger down the road.
In this "everything in the world is related" view of yours consider for a moment the following scenario:
New car sales are down.....therefore used car parts sellers such as Pep Boys must go down too....right?
Or would Pep Boys sales really increase because now 'people' are keeping their cars longer and repairing them more frequently i.e. GM's loss is Pep Boy's gain.
Now try really hard and see if you can't find a GOOG analogy in there....or maybe in Uranus....where BTW gravity is quite different.
While you make valid points. GOOG is on earth and you have outlined a legitamate point of view.
However I would like to point out a few things since I work in the Media industry that might help you understand the enviroment that GOOG is in.
1) While marketing budgets may be reduced for a lot of mediums. Media marketing dollars are moving to the internet as a medium of choice for advertising not away from it.
2) In the current economic times the trend in media is to 'reduce' the total number of outlets used and put more dollars in to fewer medium/media choices to gain better leverage. GOOG will far out distance YHOO in this area and will gain market share based on the current field
3) Yahoo's loss of financial revenue can be traced directly to the Message board relaunch being a failure which has reduced page views and visits.
4) Automotive is a little bit more a question mark. A lot of automotive ads use to be run on the Message boards so loss of revenue due to a decrease in page views would seem to make sense. Grant automotive dollars 'dried' up on $3.00 gas however it did not go away completely.
5) Bottom line is annual revenur will be over $10.00 per share with growth. Cash on hand equal to approx $32.00 per share on hand and generating another 2.50 every quarter.
GOOG will have to be come even more creative and aggressive with the cash sitting on the balance sheet. The cash will give it the ability to make things happen quicker, faster and on a grander scale.
GOOG can grow organically or through aquisitions, either way, you could see a 25% move in the stock over the next 60 days.
Money will move to winners and leave losers....
Regarding point #5. Google will be lucky to produce 1.5M in Free Cash Flow (Operations less Cap-Ex) for 2006. That works out to be about $5 / share which results in an ultra high FCF ratio of 80:1. Not good.
A simple math is: the bigger GOOG becomes, the less the growth rate it can achieve. People who bought GOOG today and expect 25% growth will be less likely to get that than those who did last year.
Size matters. And GOOG is being pushed to a level where there will more disappointments than pleasant surprises.
HOD 415.49, LOD 392.74, range 22.75, close 403.81, bounced 11.07 <.500 Fib.
Here is what I gonna say: GOOG will print another candle entirely travels inside the bottom tail of today�s candle tomorrow, and you should know what that means!
Those who sold under 400 are stop loss orders! Unlike on the way up, the one sold @ 400 will jump in @ 405 the next day, because he had gains and wants more gains! But, when GOOG was above 415 at open today, then traders got stopped out < 395, that hurts badly! This is a $20+ loss in a day, for them, they will not come back tomorrow!
Ask yourself, if you chased this morning above 415, then got bailed out @ 395, will you come back into GOOG tomorrow even it bounces to 405??? Not to mention that there are still a bunch bag holders up there waiting for jump the sinking boat! The minute there is a sign shows that GOOG is about finish its bounce and will dive again, every long will bail using mkt order, and every short will jump in using mkt order, and the LOD today will penetrated!!
Mark this post! ;))
I saw one of your strategies is to buy $220 Jan2008 PUT.
You are expecting a big drop from now on to Jan2008. While your PUT far beyond the monday. Even $50 drop, your gain will be only $10-$13.
If you are so sure GOOG will drop before JAN2008, why don't you buy deep ITM put? Wouldn't that be much more simple for you?
< Ask yourself, if you chased this morning above 415, then got bailed out @ 395, will you come back into GOOG tomorrow even it bounces to 405??? >
Seems like about 115K shares being 'chased' in AH:
Last: $ 404.80
High: $ 404.94
Low: $ 398.2654
I said 418 is another peak on the chart, and TA never fails!!
Remember, when GOOG was near 380s, I said I was looking for open my short position near 410 level, I didn�t go long there because the risk to BD is too high, although I did see a bounce might possible, then started adding 1-2 contracts Jan 400 put since 412 passed, and the Monday move was a pure set up: lift GOOG to held QQQQ and do the distribution on the rest, and I was keep adding puts in QQQQ, AMZN, CSCO, GOOG, BA & AIG.
Woohoo! They all deep in green! I have 10 contracts in GOOG Jan 07 400 put and 10 contracts Jan 08 220 put.
Yes, I think GOOG will in 200s next year!!
Paint the house before sell it! The next time I say this, you go short!!
Again Cramer pumped tech near the peak:
�Buy, Buy, I need you to buy my shares, so I can hold cash and back later when I called sell, sell!�
Just because he accidentally hit the jackpot on GS earning (that was a bet trade only to me), many just started in believe in this guy again.
Now what, GOOG not even give you a chance to bail if you don�t have any triggers of stops in there today. Damage is done, and GOOG won�t recover in 4-6 weeks, and it will see 360 again. This is just another confirmation that the inflated air in it is slowly leaking out, and GOOG is basically the same thing like yahoo in 2000.
Trading in double digit is the reasonable range for it.
Big, no, this is a huge black engulfing candle covers the entire last week! It is panic selling, shake out won�t go below 400 mark!!
Don�t you think GOOG picked a best time to do IPO?? Don�t you think GOOG already passed the highest growth rate time? Do you think GOOG can keep its peak growth rate day after day, Q after Q, year after year? If any of these answer is �Yes!�
Then, GOOG only goes down!!
Tuesday's admission that Yahoo's previously rock-solid display advertising business is seeing advertising weakness in "some of the most economically sensitive categories" is perhaps even more concerning for investors. The business has long benefited from the secular shift in advertising dollars online. A range of old media properties, especially newspapers, have suffered in response.
If the current slowdown for Yahoo proves to be real economic cyclicality, however, the days of secular trends masking old economy-style realities could be drawing to a close. Internet companies in general have already come to terms with revenue seasonality - once overwhelmed by the sheer speed of quarterly growth. So it should come as no surprise that broader cyclicality will also exist with online advertising. Structural shifts will continue to fuel online advertising. But as it becomes more mainstream it will become increasingly sensitive to changes in overall spending.
Yahoo's revenue growth should comfortably outpace its old media peers for some time. However, with the shares already priced for that, any further signs that Yahoo, and other internet media properties, are losing their ability to defy gravity will be severely punished. Such signs would raise questions over how long the headlong boom in search advertising can continue. It is sheltered to an extent because it allows value-for-money to be measured more easily than other advertising options. And much of the business comes from thousands of small merchants rather than big corporations. But even search will, one day, have to bow to cyclical realities.
Yahoo ad sales have dropped. Seems that this might be might be attributed to Goog's investment in AOL/TWX?
ie. more ads and search revenue from TWX/AOL directed to Goog? AOL stickiness & TWX ad revenue has been improving.
maybe goog is taking it from yahoo!!!...thanks made 13% in the 410 Oct. opt.'s calls today...nice bound back from the low...goog is a 460 easy with x-mas sreaches picking up more cause people are looking to save money by not driving to the stores...look at news paper ads...sales way down...all while goog is growing in a oil sky rocketin market!!! hmmm maybe!!!
Im sorry you have to loose on this one...Ouch! You will have to buy it at 500 to cover your short. Yikes...you chould just give your money to Darfur. at least you will be doing something good. Please cover now...Its just crazy to short GOOG. Have you seen 07- 08 est. ? How dumb do you haqve to be to do that? How do you have any money left?
Look at the chart, you only see this kind of dive right after the peaks: 475, 450, 427 and now 418.
Each dive like this leads GOOG dip back to 200 EMA, and the weakest sign on the chart is: the gap between 50 and 200 EMA is getting smaller and smaller, eventually you will see dead cross printed!
This is telling me the bull is tired and bear is getting stronger.
It "on Mars" and "on Earth". Other than that, what you are saying is just common sense. Long term GOOG is the best investment out there. Day-today stock fluctuations should be ignored. Try to see a BIG picture and just add to your position on pullbacks.