This page has been archived and commenting is disabled.
Why I’m Not Buying Google on this Dip.
You would think that I’d be pounding the table getting you to buy the dominant Internet search engine after its shocking $160 (25%) fall this year, but you would be wrong. Basically, Google blew China, far and away the largest generator of world GDP growth for the next decade, and home of the greatest untapped market of Internet and search users.
Google had very little choice in the matter. But their exit was not the result of some high minded, idealistic paean to freedom of speech for the Chinese people. Google was driven out, like a rampaging, man eating tiger, by relentless high level hacker attacks that threatened the very core of its intellectual property. These were launched by a variety of Chinese state funded enterprises, as well as from deep cover moles from within the company.
Sergei Brin, the architect of the company’s China policy, naively expected the masses to rise up and demand unfettered access to Google. Wrong! The average Chinese worker is only interested in boosting his personal standard of living, and could care less about the fate of a foreign devil multinational. Brin could also have enlisted the help of the US government, which has enormous leverage over the Middle Kingdom by running a $227 billion trade deficit there (down from $268 billion the previous year). But such assistance was never sought. In any case, Secretary of State Hillary Clinton is only half way through her copy of International diplomacy for Dummies.
Looks like the firm grown up, CEO Eric Schmidt, was out to lunch when these decisions were made. Google is the most high profile victim of an economic war that is rapidly heating up between the US and China (click here for more details at http://www.madhedgefundtrader.biz/Ian_Bremmer.html ).
It appears that Google investors are growing less tolerant of the firm’s quixotic forays into other money losing business. The mobile space is running away from them. Personally, I have never met anyone who owned an Android smart phone. It has a large commitment to alternative energy. Now I hear that they want to go into television. Did I mention that they have a space program? Google is increasingly being priced like a public utility it has become, not the hyper growth super nova it once was.
You’re better off using this dip to buy Chinese competitor Baidu (BIDU), which I recommended at $125 in December, 2008 (click here for the call at http://www.madhedgefundtrader.com/December_23__2008.html ), before its run to $825. I’m so proud of that call, I still keep that “buy” ticket in my wallet next to my spare condom, so I can whip it out at bars and impress friends.
To see the data, charts, and graphs that support this research piece, as well as more iconoclastic and out-of-consensus analysis, please visit me at www.madhedgefundtrader.com . There, you will find the conventional wisdom mercilessly flailed and tortured daily, and my last two years of research reports available for free. You can also listen to me on Hedge Fund Radio by clicking on the “Today’s Radio Show” menu tab on the left on my home page.
- advertisements -
I have a Droid Eris. I had an I Phone, but when I resigned my job (yeah) I had to get another phone. The I Phone sucked in this way: every other call was dropped.
So, I had read about the new Android and it's younger brother, Eris. Eris had touch screen like Iphone. I got one. I love it. It's a little buggy now and then. And, not that I will, but you can do video chats now. All my google contacts are pulled into my phone book. Which is a plus and a minus. The google map ap is cool. The phone camera is 5mp. The Incredible is 8mp. I am sure there are dozens of other things I could be doing, too. But I am too busy reading ZH.
Verizon's coverage is much better.
Verizon Fios's system will allow you to broadcast YOUTUBE. So, maybe you could send a YOUTUBE you like through the Droid to a friend's fios and ads would follow and display? Hmmm...does that make sense?
Let this be a warning to all foreign companies trying to do business in China, they will f you over, seemingly at random just like Hugo the thug in Venezuela.
Congrats on the BIDU call Mad.
Google made a great search engine, and then figured out how to monetize through the adwords program. Unfortunately, google has stumbled on EVERYTHING they have tried since then. Froogle, the google phone, space race . . . they are dabbleing in many different areas, but have yet to come up with anything meaningful. I was hopeful early on that they would do something bold to expand their personalized advertising by perhaps buying dish network, and then serving individual TV ads to you based on what they know about you from your search history. . . you know, expand their advertising model beyond WEB. Sort of sad, but starting to look like they are a one hit wonder.
I know several people with an Android and have used it. It an excellent phone which could be used for fun or for business given its keyboard. If I was still working in the corporate world I would trade in my iphone for an Android. Give Google time they will rise again. No doubt China was a set-back but they were not going to be given access to that maket. China controls their markets and decides which business they will let non-Chinese run. Search is not one they will give up....
madhedgefundtrader if you're proud of making money off a communist-controlled state-run monopoly, you don't deserve freedom. Kennedy: "Freedom has many difficulties and democracy is not perfect, but we have never had to put a wall up to keep our people in." And we never had to build a wall to keep information out.
Come on absurd, it was a great trade. Better to rail on the commy bastards masquerading as capitalists while hiding behind the great firewall of china.
In the US, that is to prevent people from going out. Like Las Vegas.
Look at Google whose motto is "do no evil."
Then look at Goldman Sachs. 'Nuf said.
Indeed true that Google was booted out of China. Here is part of what the Chinese government knew - not being covered much. Google is criminally charged in Belgium, and is facing anti-monopoly proceedings before the EU commission, for illegally blocking the websites of an EU citizen who was a political refugee from the US - Google is criminally charged with illegally blocking all the guy's websites from Google search results under US orders. Wikipedia is charged too for spreading lies and criminal defamations about the guy, they hate him at Wikipedia he had published on article on Wikipedia as a CIA front.
When this gets rolling it may nail Google in Europe, huge losses. Will give a boost to search engines like Ixquick (Netherlands based) that aren't under US propaganda orders to block websites. Interesting story, Google is a giant hypocritical liar. Here's what China knew as it made the decision to kick out Google:
Letter to China: Google hypocrisy, facing criminal charges
Marc DeRuijter - 25.01.2010 18:31
Powerful letter received today by China, exposing the hypocrisy of both Google Inc and USA gov't - who are both criminally charged in Belgium, over illegally censoring the journalism sites of a US dissident in Europe, as part of a US-CIA scheme to murder him - so aren't Google and the US gov't, both dishonest frauds in complaining about 'internet freedom' in China?
For background on the criminal charges recently filed in Belgium, against Google ...
(rest of article here -)
http://www.indymedia.nl/nl/2010/01/64949.shtml
Says the Chinese agent... er, graduate student... living in Brussels.
This analysis smells off to me. Schmidt is directly advising the administration. The press recently humiliated him due to an affair with a staffer. That affair might result in a divorce which could actually have implications for the share price.
Google has started lobbying the US government heavily, and they also recently advertised for a bond trading desk. They're going into the ISP business, which means that they're attempting to assert a position within the government.
So, when the Democrats get kicked out of office, Google is going to have a fight on its hands. Not that it really matters, considering other issues facing the broader economy.
...spare condom in the wallet? Better check the "best before" date.
Date was 6/1/1998.
You don't need data and charts. What you say makes perfect sense without them.
You're better off buying red hot solars, especially Chinese solars:
http://finance.yahoo.com/q/cq?d=v1&s=csiq,fslr,jaso,ldk,sol,solf,spwra,stp,tsl,yge
Schwing!
"so I can whip it out at bars and impress friends."
Better to whip out the unused condom than the used one to impress
friends.
WTF is up with all these skanks, man. She looks like some sort of bobbleheaded, flat-chested twig, might be a guy if you buzzed it's head.
Truly pathetic, it's obvious you need a girlfriend besides Rosie.
Wasn't honing in on her "flat chest"....I am Greek! And Rosie ain't my style!
Greek ay? Then show the real poster boy.
LOL suuure Leo.
Now that you officially denied it, I believe you ;)
She looks Caucasian to me. But I'd be tempted to buy her anyhow.
Wonder what the wife would think of that?
Lease, don't buy.