ironer05

Google Layoffs: How to Reverse a 55% Stock Decline

Visiting Google recently, I've noticed one small sign of these so-called "layoffs". The Googleplex has 4 buildings, with entrances a few tens of feet from each other. Until recently, each of them had a "visitor lobby", manned with receptionists; the other day, I noticed only one of the lobbies was manned, the other three are now marked "employees entrance" (employees can get in from all of those entrances, and more, by sweeping their badges).

So that's quite a few temp/contractor receptionists "laid off", I'm sure. Is it "madness" as you say? Pah: I say it was a waste before -- those extra temps added nothing to Google's business, and as a stockholder I'm quite happy that Google is FINALLY moving to *cut all waste*, big and small. So now when I visit I need to go to a specific lobby -- the one that's manned -- rather than wonder which of the four is right... big furry deal! Wish they'd done it before, but I'm glad to see their new CFO has gotten started the RIGHT way.

I could say the same of the "tea service" that used to interrupt some meetings and seem to have disappeared (now if you want tea you go to the "microkitchens" and make it yourself, instead of having tea service go around meeting rooms with a cart -- AGAIN, *big furry deal*!), the valet parking, the vast numbers of uniformed security guards who once roamed the grounds -- HIGH TIME the firm cut such wasteful frills!

Buying Google, All the Way Down

just.a.guy, "Google stock down. A big slug of Google options worthless" doesn't apply if you're thinking of options owned by employees as the context suggests, given googleblog.blogspot.co... :
current employees of google (except a few senior VPs) can sell their vested post-IPO options, in daily auctions in which several financial institutions bid, for what turns out to be essentially the Black-Scholes value (and remember these options can be exercised at any time in the next TEN YEARS, so their time value is awesome!), so even options that are out of the money are worth cash (and the owners of those options would lose the opportunity of selling them if they left the company, as that opportunity only applies to current employees -- brilliantly designed "golden handcuffs"). For example, such options who are currently over $100 out of the money can still be sold (by current google employees, only) for over $50 -- and as GOOG's volatility increases, so does the premium the financial institutions bidding for those options are willing to pay over their (possibly negative) intrinsic value (as Black-Scholes predict). So I think you'd better redesign your hypothetical "Google crash scenario" to hide this "little" detail;-).

Why I'm Long Mastercard, Short Amazon

Where do you get your numbers for GOOG and AMZN's PEs, which you say are about 50 and 90 respectively? I see about 39 (forward 32) for GOOG, 66 (forward 50) for AMZN -- very roughly the same ratio as for the numbers you mention, but very different numbers from yours (and much less scary ones;-). URL please?

Why I'm All About Apple

We're awfully close to the 50-days moving average, so bargains in the near future look unlikely. If you have a very long-term outlook (and don't mind running a substantial risk of never buying the stock) you might decide to look at the 200-days moving average, which, while steadily increasing, is still below 130 -- suggesting a small but nonzero chance of a bargain in the 130s/140s within a few months. Me, I followed these silly technicals too long on this stock, foregoing opportunities to buy in at less than 1/10th the current price 3.5 years ago "because it was well above the 200-days moving average":-(. And I was asleep at the wheel (or rather long to my limit in other, not-as-good stocks, but that's another story) the one and only time it went below 200-MVA in recent memory, 1.5 years ago (at that time I could have bought in for around 1/3 the current price). So at last I gave up on the silly technicals and just bought the stock (in the mid-160's) -- for about 1/10th of my non-bonds portfolio value (I do believe in differentiation... I say "non-bonds" rather than "stocks" because in that portfolio I also hold commodities ETFs and ETFs shorting various indices, as well as stocks). My guess is that a year from now I'll be looking at juicy returns; probably not as good as the 86+% you'd have gotten over the last 12 months, but better than, say, the 23% HPQ would have given you over the same period of time.

Why I'm All About Apple

We're awfully close to the 50-days moving average, so bargains in the near future look unlikely. If you have a very long-term outlook (and don't mind running a substantial risk of never buying the stock) you might decide to look at the 200-days moving average, which, while steadily increasing, is still below 130 -- suggesting a small but nonzero chance of a bargain in the 130s/140s within a few months. Me, I followed these silly technicals too long on this stock, foregoing opportunities to buy in at less than 1/10th the current price 3.5 years ago "because it was well above the 200-days moving average":-(. And I was asleep at the wheel (or rather long to my limit in other, not-as-good stocks, but that's another story) the one and only time it went below 200-MVA in recent memory, 1.5 years ago (at that time I could have bought in for around 1/3 the current price). So at last I gave up on the silly technicals and just bought the stock (in the mid-160's) -- for about 1/10th of my non-bonds portfolio value (I do believe in differentiation... I say "non-bonds" rather than "stocks" because in that portfolio I also hold commodities ETFs and ETFs shorting various indices, as well as stocks). My guess is that a year from now I'll be looking at juicy returns; probably not as good as the 86+% you'd have gotten over the last 12 months, but better than, say, the 23% HPQ would have given you over the same period of time.