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Author: [Investments] Topic: Did Google crack today?
wallstreetcappers send a private message View Space | Friends | Playbook |
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#1
Posted: 10/18/2012 3:04:50 PM
It is always going to happen at some point in the cycle of a business...some trigger that turns a high PE growth stock into a maturing lower PE stock..is todays alleged early release the crack which shaves 300 pts off Google's bloated PPS?

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#2
Posted: 10/18/2012 5:28:01 PM
Add good ole Chipotle to the list. Ive been waiting a long time for this sucker to crack.

It will go below 100 eventually, probably settle in around 50-60 bucks once the real numbers settle and their phony expansion PE ratio compresses.
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#3
Posted: 10/19/2012 12:40:55 AM
Don't know about Google, can't afford them anyway.  

I do have a question about airlines.  I live close to Dallas and read about AAM every day. It seems they are slowly, ever so slowly, digging themselves out of the grave. I think they are steady and solid in talks to merge with LCC.  I think the recent announcements of buying several new planes from Boeing and the announcement today that they are planning to hire 1,500 new flight attendants says that LCC is calling some off the shots there. I'm willing to bet this merger happens next year but not so sure how to position myself if this happens?  

I have 300s of AAM now with very little $ invested. Is it worth it to buy into LCC now?  What would you suggest if this scenario does happen?

I envision a huge airline with lots of gates and routes and a decent upside.

GL,   Doc
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#4
Posted: 10/19/2012 1:22:37 AM
Google seems to be getting "infected" by the move to smart phones..  People just aren't accessing google via their laptop or desktop like good ol' days.    Its per-click advertising numbers, the company's bread and butter business, were down again.  

The crazy thing about technology companies is that the pace of innovation is faster than in any other sector of the economy.    Today's winners can be tomorrows losers very quickly.  Research & Motion could write a book on this I'm sure.
  You have to be nimble with these companies.   Right now, Apple is eating everybody's lunch, but its day will come .   It's inevitable in this tech sector.
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#5
Posted: 10/19/2012 1:01:08 PM

acquisition of motorola mobility for patents for $12.5b

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#6
Posted: 10/19/2012 3:45:58 PM
To me the issue is when are these companies going to start compressing their expanded PE ratios.

All companies go through it..Apple did in the past and will again, Microsoft, Dell, Cisco..Amazon did and will again.

The question is when do these companies stop being considered hyper growth and in the process stop being afforded the exaggerated PE ratio?
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#7
Posted: 10/20/2012 12:59:35 AM
Good question, Wall... to me , their expanded PE ratios will start to contract when their growth rates contract... the law of large numbers eventually catches up. ....

The first clue at  large tech companies with limited growth prospects is when they start  to pay a dividend .  It is a valuable clue their best growth days are over...... and they don't know how to spend the money other than to return to investors...  Cisco, MSFT, etc.  


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#8
Posted: 10/20/2012 7:29:27 AM
charts for both GOOG and AAPL have both flashed strong red flag warning signs.  that said, I still feel they are on the list of the group of stocks most strongly defended by Bernanke and the primary dealers.  charts say get the hell out and cash in.  but, personally i would not short or touch them because they have been known to magically find tons of support just when things appear to be really moving to the downside. 

the valuations are ridiculous that is obvious.  they carry so much weight in the Naz and Spider every mutual fund and hedge fund on the planet is long these two. 
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#9
Posted: 10/20/2012 1:48:23 PM
Rush,

I think the compression happens way before the dividend discussions come up.

Look at the charts for the above stocks I referenced, the drop started once the markets sniffed that compression was starting.

My contention is I think GOOG compression is probably starting, AMZN will at some future point..probably if we have an economic contraction it would get hit harder..CMG I've been waiting on forever and it has started. APPL might be just beginning..

All of the above stocks will be cut in half or more once the market stops affording them hyper growth PE ratios and their rates start to slow.
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