31–40 of 170 posts
I prefer to live in a world where tech companies are our highest valued, not oil companies.
The tech companies would not exist for very long without those oil companies.
If Exxon and Google were both liquidated today which one would produce more cash? Google share prices reflect a speculator's premium. Exxon's better reflect the value of the underlying assets.
For instance, Exxon-Mobil has $347 billion in tangible assets while most of Google's value comes from its brain trust and the vision of its leadership. The same could be said of Apple though they do have $40 billion in cash.
In other words, if both companies were offered to you at half of their current valuations and you didn't know how to run either company, Exxon-Mobil would be worth many times more to you just from being able to liquidate the assets.
I realize the market cap is based on more than that but I guess I'm wondering why tangible assets don't play an even bigger role in valuations.
EDIT: AAPL doesn't have as much cash as I thought.
Earlier quoted context omitted.
Wikipedia lists the characteristics of a monopoly here: http://en.wikipedia.org/wiki/Monopoly#Characteristics Which of those characteristics do you see in Google?
The more accurate list is the "Sources of Monopoly Power": * Economies of scale * Capital requirements * Technological superiority * Network externalities All of these apply to Google, to some extent or another.
is it still a good idea to buy google stock?
Dollar cost average into it, and be a buy-and-hold investor, and it's hard to go wrong.
Exxon’s filings with the Securities and Exchange Commission, says the corporation didn’t pay any federal income tax in 2009
So Google was always more valuable to the US.
Undoubtedly, people will soon scream 'Bubble!', but I believe this is part of the inevitable shift of technology becoming the driver of the world's economy.
Every bubble comes with people who claim a technological shift or other fundamental shift has occurred. Instead, look at it analyitcally; A P/E of 30ish means that people think Google could grow 3X. Seems reasonable.
I'm on the fence. I think Google is doing amazing things and there is enormous potential. However, we're also talking about huge numbers. Annual revenue is already $60B. To go to $180B at the same margins they need huge successes. Like having self driving cars turn into a $60B/year business. Is that possible? Yes. But when you start to think about how huge the numbers are you see that its not easy.
Its hard to escape the arithmetic of the law of large numbers.
Whoopdee shit. If Exxon and Google were both liquidated today which one would produce more cash? Google share prices reflect a speculator's premium. Exxon's better reflect the value of the underlying assets.
is it still a good idea to buy google stock?
http://arachnoid.com/equities_myths
But specifically, by the time a company is widely regarded as successful, noteworthy, at the top of its game, the train has left the station. By contrast, Warren Buffett would invest in a "company" consisting of a couple of guys in a garage with a vision for the future.
I prefer to live in a world where tech companies are our highest valued, not oil companies.