"What investors seem to be doing is paying an awful, awful lot for future creativity. That might be reasonable, to at least some extent, if the company's dominant position in the industry had characteristics of a natural monopoly. But it doesn't. Usefulness of a product is insufficient for profitability unless it is coupled with scarcity. Why does Wall Street take it as given that the company will grow explosively into the indefinite future, much less maintain its profitability or market share over time?
To paraphrase Grantham, if Google is worth $300 a share, capitalism is broken.""
since google doesnt do stock splits it will be easier to see what the longer term returns are in 10-15 more years.
they are not a mature company just yet. growth stocks like this usually have concentrated peformance at the beginning. look at MSFT. no stock price appreciation since 1998.
And have any IPOs shown good valuation metrics? It seems like the data on them at that point is always questionable or not very existent. I doubt that any financial experts considered them a great 'value' (not to be confused with a great buy).
yeah I remember that. he along with pretty much every expert called google overvalued when it IPOed. This is just another example of how atrociously wrong someone with high intelligence can be when it comes to predicting the stock market. intelligence will work against you if you think you have "solved" the market and Hussman is learning this the hard way but is in such denial about it