Adomant's  Instablog

As you already can see by the headline, I am being extremely sarcastic. Funny how these two firms think that after the more than 10% sell off we have seen since the earnings release, that now is the time we need to heed their warnings and sell.

Now, it is because of mobile(not new news at all), Alibaba is starting their own search engine(oh no their going to take even more of BIDU's dominance away), and reports of BIDU investing in a mobile browser maker are untrue.

Well after all of this I guess we have no choice but to dump this loser and move on to something else, maybe GOOG hitting new highs. I've been around too long and have seen this game play out too many times. Facts are that a stock that has growth like BIDU that is trading at a discount to a stock like GOOG, is a BUY all day long, and when it does turn and it will turn soon, it will bounce at least 10%.

How come nobody is bashing these guys for supposedly dumping a stock that is so depressed and drastically oversold, that they have to be crazy. They only sell first and never even think about why they are telling you to sell at these prices. They are buying this stock right now, no matter what they are telling us to do. That is how they make money!! If they were wrong all the time, as they are with most of their calls, how can they still be in business and making as much money as they do?

The bounce is even closer, because this is the last ditch effort to get out all of the last weak hands.

It is not hard to figure out that BIDU is growing faster and has more growth potential than GOOG, but it trades at a lower multiple. It won't last this way for long. This is where I am taking profits from some of my GOOG position and buying more BIDU, I may even sell some calls and short GOOG in the near term as I believe that the upside is limited from here, without a healthy pull back.

Don't fall for the bogus downgrades, BIDU is not in any way like RIMM or are they in anyway going to lose 25% or more of their business. That is what is priced into the stock at these levels.

I'm looking for a major bounce that should take the stock back to test the $115 area quickly. Doesn't anyone remember that this stock used to outperform GOOG & AAPL, it is not new for this stock to make moves of between 5-10% within a single trading day.

Good Luck!!

Disclosure: I am long BIDU, GOOG, AAPL.