Articles filed under 'Stocks'
I originally posted this on the Google Finance discussion boards and then though I’d fix it up a bit before posting… but well anyway…
I was bearish on Google before the last earnings call.
I felt that Google would miss some numbers due to recent changes
they’ve made in the “clickable area” of their ads and their PageRank
formula. Both changes were good long term (since they’ll help combat
click fraud and spammy publishers - and generally increase the quality
of the ads). But the changes came with some immediate cost to the
bottom line in the short term.
I am now bullish on Google for the same reasons. Or really because (1)
it wasn’t that bad and (2) the long term is already here.
I wanted to provide a counterpoint to some recent articles posted on Investorgeeks that have suggested commodities are not a good place to invest. More specifically, that the commodities boom is a high risk area of investing and potentially a giant bubble.
I have a different opinion. I personally feel that investing in commodities is the only way to ensure in the coming years that your portfolio is not decimated by hyper inflation.
The Present State of the US Economy
Before we discuss this further, we need to do a quick summary of the present state of the US (world) economy:
Google will miss expected earnings numbers tomorrow (IMO). There are two recent “shoot your own foot” actions from Google that may affect their short term performance. Overall, I agree with the changes, but I wouldn’t be swinging into earnings tomorrow.
(1) Google changed the “hit area” of their AdSense ads. Before the entire ad area was clickable. Now just the heading and url are.
There are mixed reports on whether or not this is affecting overall click through rates (CTR) and earnings. On InvestorGeeks, our CTR went from 2-2.25% in September and October to 1.25-1.5% in December and January. Our overall earnings are down 40%.
Most of Google’s revenue comes from their own search page which likely had smaller drops (if at all). But if other sites have had slowdowns like we have, this would eat into Googles earnings growth.
In the long run I think this is a good move, as it will cut down on fraud… eventually leading to more advertisers and higher ad rates. In the shot term, however, folks are taking a hit.
(read on for reason #2)
With China’s GDP growth rate reaching over 8% over the past 5 years, China still may be in it for another year. China looks good for the long run, but their short run bubble may be a risky investment. With the Olympics coming and FDI in 2007 reaching 67.3 billion dollars, the highest in the world, China may have risk of a slow down. Problems include their 1.5 trillion USD forex reserve and their appreciating currency which are at the forefront of news.
Expectations have been rising faster then…
Here is an email exchange I had with my step father. Note: my mother works as a Bed Bath and Beyond store manager.
Original email back in November:
BBBY is down to 29.5 your thoughts?
-Kevin (11/26/2007)
And then my response:
As we all know there has recently been pressure on China to appreciate their currency because of the trade imbalances seen in Europe and America. As well, other East Asian countries are running into problems with their markets because China’s currency is doing so much better then theirs. Here is a quick run down of the problems, which can help you to analyze the situation.
The biggest problem is that China’s currency is undervalued by as much as what some people think is up to 35%…
Here’s my latest post about AMD.
Here’s an excerpt from a Frobes article:
“Intel’s latest desktop processors have faster clocks speeds and use
smaller transistors–45 nanometers as opposed to 65 nanometers–that
allow them to do more work with less power, _all else being equal_.
“We think that Intel is consolidating its performance lead in
desktops,” Wachovia analyst David Wong wrote in a note to investors
Monday.”
!! “All else being equalt.” All else is not equal. Sure, Intel can
brute force faster speeds with the working capital that they have, but
AMD is going to finesse it’s way into the chip spotlight, just like
they did a few years ago.
You should be able to see my recent posts here.
Tuesday, Nov. 20, 2007
by Jason
Developing the coastal regions for so long during the Mao period has left a huge disparity between the economies of the interior and the coast. The gap is so large that even though the interior in some areas is growing at the same rate as the coastal regions, the absolute gap only grows larger because of the disparity of their starting points.
While the six and seven five-year plans were based on the system that economic development would diffuse into the center from the coastal regions, this was not a good idea…
After having the opportunity to visit a rural farming community in China it made me realize many things about China’s impressive growth. It is not an efficient growth, but an inefficient one. We see skyscrapers and massive Olympic structures being constructed every month but this is only a small part of China. Outside the two great cities of Beijing and Shanghai some small communities with de-collectivized farms hardly have any paved roads, and some have none at all. While we see this huge growth in China now, I do not believe that this growth is sustainable. My main reasons are as follows:
1. No infrastructure between inner and coastal China exists. During my visit to a small village the people said…
