The Top: Google buys Nest Labs

Google has their fingers in a lot of different stuff that won't pay off (if ever) for a long long time. Much of it seems to me very speculative & "theoretical". How far and wide can they continue to spread themselves till too thin and chickens come home to roost:confused:

They're riding a wave of cash right now, but that won't last forever. What happens if their stock price is halved?
 
Quote from kerry888:

Google has their fingers in a lot of different stuff that won't pay off (if ever) for a long long time. Much of it seems to me very speculative & "theoretical". How far and wide can they continue to spread themselves till too thin and chickens come home to roost:confused:

They're riding a wave of cash right now, but that won't last forever. What happens if their stock price is halved?
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Eh, not enough for them to notice. Like buying a penny stock or a DOTM option: lottery ticket. If it pays off, wonderful, if not, no one cares.

As for calling a top, oh man. Mug's game. This time reminds me of EOY 1996, when Greenspan coined "irrational exuberance". He was right, for sure, but a bit early.
I remember an old system of mine saying gold was a buy and everything else a sell in the spring of 1999. That was right too, but it was a year before the market topped and three years before gold moved. First book I ever read about the markets said this, among its many rules, and I've never forgotten these:

"Market moves never occur when they're supposed to. They usually happen later than expected, and they go farther than anyone predicted at the time...
A trend is in force until firm evidence to the contrary surfaces. A bull market will get as high as possible with as few people as possible knowing about it. Likewise a bear market will try to slip as far down as it can before people catch on."
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Book was called Street Smart Investing. Doubt it's still in print.

This year won't be as good as last year obviously, but the most common outcome after a big breakout day/week/month/year is that the next unit of equivalent time is spent consolidating the breakout and usually winds up, net, ending in the same direction as the breakout direction. So yeah, it might be irrationally exuberant, but so what?
 
We're not even close to overvalued as long as GOOG, MSFT, and AAPL are below a 20 PE there's no chance of any kind of bear market correction greater than 20%.
 
Quote from bwolinsky:

We're not even close to overvalued as long as GOOG, MSFT, and AAPL are below a 20 PE there's no chance of any kind of bear market correction greater than 20%.
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wtf? GOOG is >30 PE and nearly 5X book.
 
Quote from drownpruf:

wtf? GOOG is >30 PE and nearly 5X book.
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They have to all be there. MSFT isn't and AAPL will be a long time from now before it does.

5x book for a 5 year growth rate annualizing greater than 30% the valuation sounds about right but also would bet Android loses back share to the iPhone.
 
if there was a voting button. I would vote this acquisition was definitely over paid.
when I saw it.,( i own a nest) . thought there was some mistake. may be a zero or 2

100 million tops! should have been paid. - doesnot google ventures back nest.
is this some money laundering scheme here. .LOL.!!
 
drownpruf said:
It's not going to monetize for GOOG. They don't have a fucking clue how to diversify and thus they overpaid by an OOM for something that does nothing for their ad model or ability to market services.
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Well google's (very)long term goal is to put ads into your homes after they take it over. IE: if you run out of milk, google will remind you then you can click and have it delivered. If google detect you running heat all the time at a high setting via thermostat, they may display ads related to items for cold temperature/location, or vacations to warmer places etc.. I am sure they have better use cases.

But i agree google way overpaid for nest, it's a running joke. You buyout a company mainly for the below reasons:

1) Talent - negligible, what it had like 10 guys?

2) Marketshare - as drownpruf said, nest has a fraction and there is little ecosystem/lock in for those existing customers, again negligible.

3) Remove competition - See above, nonfactor.

4) Technology(and patents) - this is really not rocket science there is nothing proprietary, it's just wireless thermostat/co2 detector etc.. All those posters going on and on about their tech. It's laughable. Google could done it themselves in a few months - just slap a thermostat with bluetooth, comeup with an api, and an android gui you done. Wtf....

I really don't understand what google sees in nest that's worth even 1billion, let alone 3billion. This is nuts! There must be something else going on? they have a lot of smart people, cant be that stupid?
 
newguy05 said:
well google's (very)long term goal is to put ads into your homes after they take it over. Ie: If you run out of milk, google will remind you then you can click and have it delivered. If google detect you running heat all the time at a high setting via thermostat, they may display ads related to items for cold temperature/location, or vacations to warmer places etc.. I am sure they have better use cases.

But i agree google way overpaid for nest, it's a running joke. You buyout a company mainly for the below reasons:

1) talent - negligible, what it had like 10 guys?

2) marketshare - as drownpruf said, nest has a fraction and there is little ecosystem/lock in for those existing customers, again negligible.

3) remove competition - see above, nonfactor.

4) technology(and patents) - this is really not rocket science there is nothing proprietary, it's just wireless thermostat/co2 detector etc.. All those posters going on and on about their tech. It's laughable. Google could done it themselves in a few months - just slap a thermostat with bluetooth, comeup with an api, and an android gui you done. Wtf....

I really don't understand what google sees in nest that's worth even 1billion, let alone 3billion. This is nuts! There must be something else going on? They have a lot of smart people, cant be that stupid?
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bingo.. U r on the money.. I tell ya.. The only explanation is.. Money laundering. Google ventures had invested in nest. Duh!!... No other fucking explanation.. .. There was a vested interest in spending the 3.2 billion.. .
 
+1 to downpruf.

The only thing dumber would have been if facebook had actually bought snapchat for $3B or whatever. Those two morons who turned it down are going to regret that when there app that makes no money is worth like $10k.
 
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