GOOG worth $30/share? (per Hussman)

Google is indeed tricky to value. I see it being worth $1000 within five years. However if they do not use their stock to acquire a media company the share could be closer to zero in ten years. The space that they are in lends itself to a high rate of adaptation and business tend not to become mature cash cows but become obsolete. Just ask Michael Eisner about infoseek or think what AOL would be worth on it's own.
 
Quote from zf trader:

I see it being worth $1000 within five years.
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That would make it one of the biggest companies in the world, far more valuble than any media company, more valuble than Microsoft is today, much more valuble than Intel, and almost as valuble as GE. In just 5 years. Do you really think that is realistic?

Martin
 
Well I agree that $1000 a share seems overpriced. Creamer make a compelling case though when he runs google's earnings times yahoos multiple. Last night he ran 50 times 9. My math is 50 times 20. It is quite reasonable to think that google will be earning $20 a share in 2010, although the perceived growth rate will be more difficult to achieve.
 
Quote from zf trader:

Well I agree that $1000 a share seems overpriced. Creamer make a compelling case though when he runs google's earnings times yahoos multiple. Last night he ran 50 times 9. My math is 50 times 20. It is quite reasonable to think that google will be earning $20 a share in 2010, although the perceived growth rate will be more difficult to achieve.
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all companies go to <20 pe at some point when the growth slows. you have to model googles maximum earnings at 20pe not 50pe. look at the history of all the great growth companies. intc,msft csco, dell.
 
NO ONE but NO ONE can say what a stock's VALUE is!!!!..The value of any stock on any given day is WHAT buyers are willing to PAY for it...

I guess this person who says GOOG is worth $30.00 didn't buy the NOV 400 Calls for a lousy $.25 cents right before earnings and sit and watch them shoot to over $1.60 !!!!....$5k (for 200 Calls) to $32K because GOOG, for now, is a money machine...

If GOOG tomorrow closes at $1,000. a share, then its value is $1,000.00 a share..

If GOOG tomorrow closes at $30.00 a share, then its value is $30.00 a share...

Thanks GOOG for making me TONS of $$$$$$$$$$ !!
 
Well, I have been tempted to short google every day since it's IPO. When it first hit $100 the multiple was out of this world crazy and I wanted to short it badly. I never pulled the trigger and to keep myself from doing so I try very hard to come up with bull thesis. I can't help but think that in the long run the value of google is zero as the intellectual property becomes worthless depreciating in a fashion similar too a blockbuster drug at a pharmaceutical company. The time frame and specifics can be disputed but google is likely to go up a lot from here and will likely be a good short once it goes under $200.
 
Quote from Maverick1:

Hussman is displaying a classic judgemental bias called representative bias when he says "Having made similar comments regarding the value of Cisco, Sun, EMC and Oracle near the peak of the tech bubble, with value estimates (which turned out to be slightly optimistic) at small fractions of their going prices, I'm pretty comfortable with that figure."

I am surprised that an investor of his stature would make that mistake, but I have to remind myself that I am indeed 100% cynical when it comes to the forecasting prowess of gurus.

What also gave me a good laugh was the following comment: " and no high-cost obstacle to entry aside from smart statistical and computing algorithms.". Um, excuse me? aside from smart statistical algorithms? How about throwing out the baby with the bath water while you're at it? LOL.

The reason why GOOG has done so well in growing earnings is precisely because its algorithms lead to superior monetization, relative to YHOO. Secondly, Hussman is grossly underestimating GOOG's expansion abroad and the upside from margin expansion there, as well as GOOG's potential impact on the media sector.

Hussman should stick to his broken toys like the Fed model. I do enjoy reading his big picture comments though :)
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Very well put. imo there is still tremendous potential inside of that money machine.

If I might add, the market is neither rational or efficient. Trying to invest on those two premises usually results in an early exit. As evidenced by the numerous hedge funds who went belly up trying to short GOOG.
 
I have never traded GOOG even though I was tempted to do so. I will never do. But I know this as a fact and I can actually see this news although it has not happend. I can see 3 to 9 months from now, after their announcement, you will see this title in Marketwatch headline:

Google Dissappoints


Shares tumble over $70 !!!

Google profit soared 700% below analysts expectations of 900% and shares of Google were punshihed by $70. !!!!!:D
 
Quote from zf trader:

Well, I have been tempted to short google every day since it's IPO. When it first hit $100 the multiple was out of this world crazy and I wanted to short it badly. I never pulled the trigger and to keep myself from doing so I try very hard to come up with bull thesis. I can't help but think that in the long run the value of google is zero as the intellectual property becomes worthless depreciating in a fashion similar too a blockbuster drug at a pharmaceutical company. The time frame and specifics can be disputed but google is likely to go up a lot from here and will likely be a good short once it goes under $200.
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Agreed.

Like TASR. The best time to short is after it starts to consistently decline over time. (and when everybody stops talking about it ... keep holding your short all the way down.) No need to try and catch the top.

Unlike TASR. Google trades many options. Looking at a few options plays.
 
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