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Google Passes Exxon to Become Second-Most Valuable U.S. Company

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Re: Google Passes Exxon to Become Second-Most Valuable U.S. Company

#51

Post by boomzilla »

Steko wrote: post #28
martythemaniak wrote: post #6

I know it sounds a little ridiculous, but I think Google still has a long way to grow. I can easily see them as the first trillion dollar company and well beyond that. I think they understand the process of re-inventing themselves better than any other tech company. They acquire a lot of companies, some of which continue to grow and change the very nature of Google itself (example Android). They also understand Black…

Agree the sky is the limit for Google's future but there's always some risk that FB or Baidu or someone could come in and take 80% of Google's users. Aso by any reasonable measure Apple's market cap should be well over a trillion. Take away their $165 billion cash pile from their $465 billion market cap, give them 0% growth and you're left with the idea that Wall St's expects Apple to be turning out the lights in 4 o…

The big reason investors are skeptical with Apple is that there is no guarantee they can pull the same revenue without creating a hit product every two years. Once the revenue starts to shrink, things go downhill very quickly.

Re: Google Passes Exxon to Become Second-Most Valuable U.S. Company

#52

Post by corresation »

lutusp wrote: post #39
dmead wrote: post #22

is it still a good idea to buy google stock?

To answer your general question: 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.

By that analysis, Google "left the station" in what, 2005? Microsoft left the station in the late 80s. Apple left the station in 2005?

And to the contrast, Warren Buffer invests in things like Conoco, WellsFargo, and, humorously, Exxon.

Small doesn't mean growing. Large doesn't mean shrinking. Any analysis that assumes either is simply flawed. Buffet looks for companies with good fundamentals and returns, whether they're two guys (though I've never, ever heard of him doing such a speculative investment. That seems entirely contrary to his philosophy) or 200,000 people.

Google currently makes most of their money in advertising. Anyone paying attention knows that they're working really hard at expanding out from that, and in a few short quarters their non-advertising revenue exploded to 10% of their total (it sounds small, but 10% of a huge number is a huge number), with an incredible growth rate. If they start successfully leveraging their smarts and technology, they truly can be a trillion dollar company.

The same is true of Apple. They've coasted on the iPad/iPhone train for a while -- a very enriching coast -- but if they apply their designs and intellect to other industries, the impact can be absolutely enormous.

Re: Google Passes Exxon to Become Second-Most Valuable U.S. Company

#53

Post by encoderer »

guelo wrote: post #44
Steko wrote: post #28

Earlier quoted context omitted.

Agree the sky is the limit for Google's future but there's always some risk that FB or Baidu or someone could come in and take 80% of Google's users. Aso by any reasonable measure Apple's market cap should be well over a trillion. Take away their $165 billion cash pile from their $465 billion market cap, give them 0% growth and you're left with the idea that Wall St's expects Apple to be turning out the lights in 4 o…

That's the thing about Apple, they have $165 billion but they have no idea what to do with it. The only R&D they seem to be able to think of is how to make their consumer boxes shinier. No moonshots, no diversification. That's why Wall Street doesn't see any huge upside.

Apple is traded cheaply to its P/E. That's true. But I think any attempt to explain that in a single sentence is certainly flawed. It's complicated. Apple is widely held. There is ENORMOUS open Options interest in the stock. Etc. There are many reasons it's not trading at its ATH's.

So I think you're wrong about your conclusion but I also think you're wrong about your premise. Product development cycles take several years. It took 3 years to follow the iPhone with the iPad -- essentially just a big iPhone and a product that they started working on before the phone. There were 6 years between iPod and iPhone. It's not like cash is the only constraint here.

I of course do believe in Apple, and I use their products, and yes I'm definitely long on their stock. And I see so many people today frustrated by their low P/E. It delights me. Every month I dollar cost average into it and the longer it stays in this "cheap" P/E range the better.

Re: Google Passes Exxon to Become Second-Most Valuable U.S. Company

#54

Post by yapcguy »

martythemaniak wrote: post #6

I know it sounds a little ridiculous, but I think Google still has a long way to grow. I can easily see them as the first trillion dollar company and well beyond that. I think they understand the process of re-inventing themselves better than any other tech company. They acquire a lot of companies, some of which continue to grow and change the very nature of Google itself (example Android). They also understand Black…

The first Trillion dollar company is/was PetroChina. At least for a few days.

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aA1jw...

Re: Google Passes Exxon to Become Second-Most Valuable U.S. Company

#55

Post by wlesieutre »

guelo wrote: post #44
Steko wrote: post #28

Earlier quoted context omitted.

Agree the sky is the limit for Google's future but there's always some risk that FB or Baidu or someone could come in and take 80% of Google's users. Aso by any reasonable measure Apple's market cap should be well over a trillion. Take away their $165 billion cash pile from their $465 billion market cap, give them 0% growth and you're left with the idea that Wall St's expects Apple to be turning out the lights in 4 o…

That's the thing about Apple, they have $165 billion but they have no idea what to do with it. The only R&D they seem to be able to think of is how to make their consumer boxes shinier. No moonshots, no diversification. That's why Wall Street doesn't see any huge upside.

Says someone with no more insight than the rest of us on what's going on internally at Apple. Recent hires and job postings suggest that they're angling for the wearable electronics market, and I would bet they'll be years ahead of the Pebble of Galaxy Gear when they do announce something.

Would people prefer that they be like Google, with piles and piles of R&D projects that go public, get users, and are shorty abandoned? Ask me how long Google has been working on MMS support in Google Voice for. I honestly wish they'd never bought Grand Central, at least it would have improved in the last several years.

Re: Google Passes Exxon to Become Second-Most Valuable U.S. Company

#56

Post by milkshakes »

throwaway_yy2Di wrote: post #48

Yet it's so small : XOM ('12) GOOG ('13) Revenue $453 B/a $60 B/a Profit $45 B/a $13 B/a Market cap $393 B $394 B https://en.wikipedia.org/wiki/Google https://en.wikipedia.org/wiki/ExxonMobil (101 for anyone who doesn't know this: revenue is how much you sell, profit is what's left over for shareholders, market cap is how much shareholders think that profit stream is worth). Relevant: check out wikipedia's rankings o…

You're neglecting growth: https://www.google.com/finance?chdnp=1&chdd=1&chds=1&chdv=1&...

Re: Google Passes Exxon to Become Second-Most Valuable U.S. Company

#57

Post by lutusp »

corresation wrote: post #52
lutusp wrote: post #39

Earlier quoted context omitted.

To answer your general question: 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.

By that analysis, Google "left the station" in what, 2005? Microsoft left the station in the late 80s. Apple left the station in 2005? And to the contrast, Warren Buffer invests in things like Conoco, WellsFargo, and, humorously, Exxon. Small doesn't mean growing. Large doesn't mean shrinking. Any analysis that assumes either is simply flawed. Buffet looks for companies with good fundamentals and returns, whether the…

> By that analysis, Google "left the station" in what, 2005?

By that analysis, Google has most likely experienced the majority of its growth, and its current price reflects not only its actual value but the psychology of investors who try to buy into companies that are already successful, expecting that future returns will reflect past performance (the single most common investor mistake).

> Buffet looks for companies with good fundamentals and returns ...

No, he looks for companies that are undervalued.

http://www.investopedia.com/terms/u/undervalued.asp

Quote: "Buying stocks when they are undervalued is a key component of mogul Warren Buffett's value investing strategy."

> Small doesn't mean growing. Large doesn't mean shrinking. Any analysis that assumes either is simply flawed.

Then it's a good thing I never made these claims -- they're yours, not mine.

Re: Google Passes Exxon to Become Second-Most Valuable U.S. Company

#58

Post by yapcguy »

encoderer wrote: post #46
frogpelt wrote: post #33

I have to say I don't understand companies that have very little in the way of tangible assets being valued higher than companies that have mounds of tangible 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 comp…

Google also has a pile of cash. And a fiber optic network. And millions of square feet of data center space. Exxon: Assets: $350bn Liabilities: $75bn Apple: Assets: $225bn Liabilities: $53bn Google: Assets: $110bn Liabilities: $15bn If you're trying to value a stock on fundamentals alone, you should take these tangible assets (as you call them), back them out of the market cap. Then look at what kind of P/E multiple…

It's sickening to see all these cash rich tech companies being worshipped, yet they don't pay their employees what they're worth, for generating all that value.

http://pando.com/2014/01/23/the-techtopus-how-silicon-valley...

Re: Google Passes Exxon to Become Second-Most Valuable U.S. Company

#59

Post by matthewmacleod »

raldi wrote: post #34
nightpool wrote: post #16

Earlier quoted context omitted.

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.

Physical strength is one source of bullying power. Would you say that anyone who is strong is a likely bully?

I think you are conflating a monopoly with the abuse of such.

Re: Google Passes Exxon to Become Second-Most Valuable U.S. Company

#60

Post by [deleted] »

milkshakes wrote: post #56
throwaway_yy2Di wrote: post #48

Yet it's so small : XOM ('12) GOOG ('13) Revenue $453 B/a $60 B/a Profit $45 B/a $13 B/a Market cap $393 B $394 B https://en.wikipedia.org/wiki/Google https://en.wikipedia.org/wiki/ExxonMobil (101 for anyone who doesn't know this: revenue is how much you sell, profit is what's left over for shareholders, market cap is how much shareholders think that profit stream is worth). Relevant: check out wikipedia's rankings o…

You're neglecting growth: https://www.google.com/finance?chdnp=1&chdd=1&chds=1&chdv=1&...

[deleted]
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