Mark Krieger

Baidu: Sky High Expectations Are a Recipe for Disaster

I don't want to sound too arogant on this one, but I told you so!!!!

Is Google Expensive?

you have a point----and you like the same movies as i do!!!

Baidu: Sky High Expectations Are a Recipe for Disaster

well the article might stink, but I was right! The stock did crater $80 in less than 12 hours--- i did cover today at $349 in premarket..for a small loss...


On Oct 09 01:53 AM msrick wrote:

> This has got to be one of the worst write-ups I have ever seen –
> the entirely simple nonsensical.
>
> Let’s disseminate...
>
> "Well I have to admit, arguing with the market is a bad bet, especially
> when you are short one of the hottest search engines in the world,
> Baidu (seekingalpha.com/symbo...)."
> SO LET ME GET THIS STRAIGHT - YOU ADMIT THAT BIDU IS ONE OF THE HOTTEST
> SEARCH ENGINES AROUND, YET YOU TAKE UP A SHORT POSITION IN THE STOCK??
> CAN YOU NOT SERIOUSLY THINK OF A BETTER COMPANY TO SHORT – I DON’T
> KNOW - SAY A COMPANY THAT’S UNPOPULAR?
>
> “Being part of the last $100 rise in a BIDU short position has not
> been a pleasant experience, but being stubborn too long in the market
> is a recipe for disaster and I finally covered my position after
> the shares ran up another $40 just in the last two trading days.
>
> I just couldn’t take the pain anymore and decided to throw in the
> towel. For the record, every time I cover, it seems the stock drops
> immediately after (anybody else have that problem?).”
> EVERYTHING IS WRONG ABOUT THIS SECTION – IT’S ESSENTIALLY MEANINGLESS.
> THE TRANSLATION OF WHAT YOU ARE TELLING YOUR READERS IS THAT ALTHOUGH
> YOU COVERED YOUR SHORT POSITION - THEY SHOULD STILL HOLD THEIR SHORT
> - BECAUSE EVERY TIME YOU COVER, THE STOCK DROPS?? LOL
>
> YOU’RE A REAL WINNER - IF THE STOCK CONTINUES TO RISE, THEN YOU GOT
> IT RIGHT BY COVERING, IF THE STOCK DROPS, THEN YOU ALERTED YOUR READERS
> – HEY EVERY TIME YOU COVER, THE STOCK DROPS – WINK WINK!!
>
> “Why is it climbing at such a climatic pace?”
> GEE – I DON’T KNOW – COULD IT BE BECAUSE IT’S A POPULAR STOCK AS
> YOU FIRST MENTIONED?
>
> “I guess the fact that Google's (seekingalpha.com/symbo...)
> CEO said the worst of the economy is behind us, had something to
> do with yesterday’s spike, or speculators on the sidelines are jumping
> in at any price in fear they might miss the boat as it swooshes by.
> But let’s face it, the bulk of the rise is probably attributable
> to shorts covering such as myself and momentum players trying push
> the limit.
> AND THAT’S IT? WHAT ABOUT CHINA’S REVISED UPWARD ECONOMIC GROWTH,
> THE WEAKNESS OF THE US DOLLAR, THE FACT THAT THIS STOCK MAY HAVE
> BEEN TOO OVERSOLD, THE GENERAL MARKETS RISING HIGHER, THE HUGE GROWTH
> OF THE INTERNET IN CHINA, THE FACT THAT BIDU IS BY FAR THE MOST WIDELY
> SEARCH ENGINE IN CHINA?
>
> The fundamentals have been temporally replaced with the preoccupation
> of (or the perception of) robust earnings growth. Emotion and greed
> are running rampant again which is a precursor of disaster.”
> IF THAT’S WHAT YOU REALLY BELIEVE, THEN WHY DID YOU COVER YOUR SHORT
> – SHOULD YOU NOT BE ADDING TO IT?
> IS IT BECAUSE YOU SHORTED TOO MUCH TOO SOON – WITH NO THOUGHT TO
> RISK TO PORTFOLIO RISK MANAGEMENT – OR SOME SORT OF HEDGE SUCH AS
> CALL OPTIONS?
>
> “The shares are rich: BIDU’s market cap has risen a staggering 50%
> In less than two months.”
> SO?? BIDU IS NOT ALONE - PLENTY OF OTHER STOCKS ACROSS THIS AND OTHER
> SECTORS HAVE DONE THE SAME – SOME WITH VERY POOR FUNDAMENTALS AND
> WITHOUT THE HUGE GROWTH POTENTIAL BIDU HAS. JUST IN CASE YOU ARE
> NOT AWARE, CHINA HAS OVER 1 BILLION IN POPULATION WITH 300 MILLION
> WHO HAVE ACCESS TO INTERNET.
>
> “In just the past two weeks alone, the consensus of analyst 2009
> expectations have climbed another 6% to $6.14 (forward multiple of
> 68) while 2010 estimates rose 9% to $9.04 translating into 47% earnings
> growth from 2009 to 2010—those are pretty high expectations to say
> the least - but let’s assume they are correct and BIDU nails the
> $9.04 in 2010, placing BIDU’s multiple at a very expensive 46 times”
>
> IS 46 TIME MULTIPLE REALLY “VERY EXPENSE” FOR THIS STOCK? I CAN REMEMBER
> A FEW YEARS BACK, IT WAS OVER 200! (GOOGLE HAD SIMILAR MULTIPLES
> AT SOME POINT IF NOT MISTAKEN).
>
> (Especially compared with GOOG's 21 times 2010 estimates) What if
> something goes wrong? Is there any room for error in these generous
> forecasts? Is the stock priced for perfection?
> YOU ARE FOOLISH TO COMPARE GOOG’S CURRENT PE TO BIDU IN SUCH A DIRECT
> WAY. THEY MAY BE IN THE SAME BUSINESS, HOWEVER, GOOG’S MASSIVE GROWTH
> POTENTIAL IS PERHAPS BEHIND IT – BIDU STILL HAS MOST OF THIS GROWTH
> IN FRONT OF IT – ITS AN EMERGING MARKET - YOU WOULD BE MORE ACCURATE
> TO COMPARE MULTIPLES OF OTHER INTERNET COMPANIES IN CHINA RATHER
> THAN COMPARE TO GOOG.
>
> Analyst one year targets: The high one year target now stands at
> only $430, which represents a paltry 2% premium to its current price.
> To make matters worse, the analysts' mean target of $370 is more
> than 10% beneath today’s quote of $420. It makes no sense why any
> potential investor would want to buy at these lofty levels and take
> so much risk, just to attain a measly 2% return (the difference between
> the current share price and the highest target price) The risk reward
> scenario simply does not pencil out. The analysts certainly need
> to adjust their targets higher if they don’t want to look too silly.
>
> I THINK YOU ARE THE ONE THAT LOOKS SILLY. IF YOU BELIEVE YOUR OWN
> LOGIC – WHY DID YOU COVER NOW? LOOKS LIKE YOU ARE BUYING HIGH AND
> SELLING LOW?
>
> Overbought? I guess the market has a short memory. What about last
> year’s financial meltdown or the dotcom crash?
> THIS MADE ME LAUGH THE LOUDEST. WHAT ABOUT THE CRASH OR THE FINANCIAL
> MELT DOWN?? IN CASE YOU ARE NOT AWARE, STOCK MARKETS TRADE ON WHAT
> THEY PERCEIVE TO BE THE FUTURE ENVIRONMENT IN SAY 6 TO 12 MONTHS
> FROM NOW – NOT IN THE PAST. SOME EXAMPLES FOR YOU – THE CRASH OF
> 87 – THE BEST TIME TO BUY WAS SHORTLY AFTER THE CRASH. BEST TIME
> TO GET INTO INTERNET STOCKS – YOU GOT IT, JUST AFTER THE DOT COM
> BUST. BEST TIME TO TIME AFTER THE FINANCIAL CRISIS – YOU GO FIGURE.
>
>
> Stocks do get ahead of themselves and eventually rationality finds
> its way back into the markets. BIDU has gone up way too far in too
> short of a timeframe and its extreme overbought condition certainly
> makes it vulnerable to a major correction when holders with big profits
> decide to ring the cash register. Bullish sentiment is at a high
> point, so caution should not be thrown out the door.
> SO YOU THINK BIDU WITH A 46 MULTIPLE IS VULNERABLE TO A MAJOR CORRECTION??
> TO WHAT MULTIPLE 10 OR 15? I THINK I WOULD START CALLING BULLISH
> SENTIMENT AT ITS HIGH POINT IF THE MULTIPLE WAS LIKE OVER 200.<br/>
>
> In other words, be fearful when others are greedy, because sooner
> than later the abundance of greater fools willing to buy the shares
> will diminish. When this thing finally craters, it will fall at twice
> the magnitude it ran up because fear is a stronger emotion than greed
> and gravity always accelerates a fall.
> YOU SEEM TO QUOTE BUFFET, YET YOU DEMONSTRATE A LACK OF UNDERSTANDING
> IN THE ETHOS. YOU ARE FEARFUL WITH THIS STOCK WHILST OTHERS ARE BEING
> GREEDY AND MAKING MONEY. BY THE TIME YOU GET ROUND TO GOING LONG,
> I WILL BE SELLING – LOL!
> BUFFET ALSO SAID – NEVER INVEST IN SOMETHING YOU DO NOT UNDERSTAND.
> LETS FACE IT, IF YOU SHORTED A HIGH BETA, EMERGING MARKET CHINESE
> INTERNET STOCK THAT HAS IS EXTREMELY POPULAR AMONG ITS USERS, JUST
> AFTER THE MARKETS CRASHED, YOU SHOULD NOT BE INVESTING IN THE MARKETS
> FULL STOP!
>
> Bottom line: Alcoa’s earnings beat yesterday after the close has
> the market set for another big rally today, so I wouldn’t be surprised
> to see BIDU run up another $10-20 before the dust settles, but the
> bigger they are, the harder they fall. BIDU could eventually drop
> 10-20% in one session if they don’t blow away expectations the next
> time they report , especially when those expectations are getting
> sky high. I will attempt to short this bad boy once again, but will
> do so when the shares go back into a downward mode.
> BE SURE TO LET ME KNOW WHEN YOU DO – SO I CAN BACK-UP THE TRUCK AND
> TAKE UP A CONTRARIAN POSITION!!!

Shorting Baidu Easier than Shooting Fish in a Barrel

after today's $28 rise, I think it is time to short again as the market will end up giving back some of the gains by the bell

Shorting Baidu Easier than Shooting Fish in a Barrel

I appreciate your kind words..I covered...i too don't want to get greedy...


On Jul 22 10:13 AM TvonT wrote:

> Thanks for your thoughts. I'm nicely ahead on this trade this morning
> ( I was nervous yesterday); stock is off 2% percent in the 1st hour
> of trading and still headed south.
>
> I've got the mantra firmly attached to my monitor: Pigs get fat and
> Hogs get slaughtered. This is not a long term trade, get the $ and
> get out.
>
> Yeah!

Shorting Baidu Easier than Shooting Fish in a Barrel

Shane: I kind of see your point, but don't you think you could be drinking the kool aid on this one? Most of the growth and then some has already been factored in the current share price. At this point the hype on this stock reminds me of "irrational exhuberance" and tulip crash. The risk on this sucker is sky high at these elevated readings.The law of bigger numbers always comes to play in growth stories and your assumptions do not seem to take into consideration competitors gaining market share.


On Jul 21 08:51 AM Shane Farley wrote:

> china just passed 340 million web users and like 75% of these use
> Baidu almost daily. Their daily traffic is around 250 million users.
> Within a year the markets will be talking big about china being on
> the verge of having 450-500 million web users. Simply put, Baidu
> could actually be severely undervalued. Anyone who was doing heavy
> search marketing back in the early days of Google PPC know all too
> well how bids for search terms went through a hyper growth phase
> of like $.05 a click to $.44. Baidu is in this same early phase where
> bid prices, because of massive competition for traffic, is skyrocketing
> in China. This will add to the top line, bottom line, and to margin
> expansion in huge ways. Chinese users use the web more than USA users.
> Soon they will have twice as many users as the USA. Shorting baidu
> may be more like shooting yourself in the foot as bid prices for
> clicks in China jump from $.08-.$.10 to $.25 and Baidu earnings skyrocket.

Google Looks Good Ahead of Earnings

article is nice but a bit too bullish. The fact is, GOOG shares are up more than 50% from their lows and we are probably seeing a buy the rumor, sell the news scenario building up. Although GOOG's cash is up, their return on those assets will be down sharply, thus this could hurt earnings as well as a stronger dollar. I would be cautious on this one. The bar has been set too high!

The Short Case for Amazon.com

You are right- I am trying to justify my position, and so far have been wrong and you have been right, as the shares seem to be going only in one direction "up" !!


On Feb 09 12:21 PM raytayzmd wrote:

> ...sounds more like YOU are trying to justify your postition..."today's
> unveiling...woefully failed to impress"???...today's unveiling was
> common knowledge on the web a MONTH ago -- so what did you expect?
>

The Short Case for Amazon.com

It sounds like you are tryng to justify your position. Sure AMZN is a great company, it isjust over priced. Today's unveiling of its latest kindle version woefully failed to impress the Street.

Exploiting the Downside of the Markets

No question, AAPL is the best out of the bunch and a $90 stop loss order is set in place to protect the position in case they try and run this puppy up.It could bounce to $110 in no time if AAPL beats eps estimates.

On Nov 20 06:18 AM Roger Knights wrote:

> In today's decline, AAPL exhibited relative strength. It has the
> potential to deliver a big upside surprise in the Dec. quarter--from
> early sales reports it's shaping up well. Please place a stop loss
> on your position.

Amazon, Apple, Google: Buying on the Way Down

It appears you are throwing good money after bad.Trying to catch a bottom is akin to winning a lottery..it just aint gonna happen. ALL of these stocks could drop another 30-50% before the carnage finally ends.