GOOG  what causes Google to crash?

Posted on 2013-12-20
Last Modified: 2013-12-28

I am always kicking myself. I interned at Novell at the end of Eric Schmidt's tenure as CEO.

I sat in on meetings with him ( during our R&D project demos )

The biggest mistake of my life was not loading up on GOOG when he just left out of the blue.

I thought, well if he didn't revive Novell to greatness, how could Google be a winner? I didn't realize or know  that Google was a nonstop winner. I didn't see how it made money and it baffled me.

I only understood its strength in earnings after I did my own website with Adsense. I never knew how it made money.
I now know why it is an unstoppable winner, after my own website project's adsense needs.

and why the shares are at $1000 / share

Will it ever crash again?
Is this what happens with Goliath stocks? After being expensive for too long, everyone tries to sell and so it crashes?
I think that's how it crashed all the times before.
I have no doubt it will come back just as strong afterwards.
When it crashes, how low does it go, pennies?

Anything else?
Question by:beavoid
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LVL 23

Assisted Solution

by:Patrick Bogers
Patrick Bogers earned 333 total points
ID: 39733548
I do not believe it will crash into pennies unless there will be some serious fraude detected or fines which go into hundeds of billions.

If you see its track record since 2005 the stock has 12-drupled, a bit of same story Apple is.

So if it crashed i believe it could lower a couple of hundreds dollar but pennies? Only if all people in the world would stop internetting.

Author Comment

ID: 39733833
Yes thx
And if it went < $100, it would shoot back up without doubt? I can't see how it wouldn't. Is it about to be investigated? Aren't they major contributors to dem party?

Once I pay my house off in a few weeks, I am going to become a tech stock dog, combing for stocks with good EPS.

but,  Once a stock gets good earnings per share, is it always too late?
I get that feeling when I comb the pages.
LVL 23

Assisted Solution

by:Patrick Bogers
Patrick Bogers earned 333 total points
ID: 39733948

If it will loose more then 90% of its worth there is something seriously wrong with the company.
As Google is volatile (is this a correct english word?) it can be very rewarding but could be dangerous to get into at this current price.
Since the economy is not growing at the rate Google does it is bound to collapse at some time. My advise? wait for this meltdown and get in :)

Why i say this? as i am just a data-platform-keeper my core business is computers and servers but so it seems i am employed by one of the biggest suppliers of electronic stock-exchange data in western Europe so you get a grip of the business.
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Author Comment

ID: 39733952
I don't think it can stay > 1000 for long. This always happens to Goog, and when it crashes it boomerangs back up cause its money making is so awesome. Maybe it simply won't crash.
LVL 53

Accepted Solution

COBOLdinosaur earned 167 total points
ID: 39736845
Apple was a high flyer that almost went bankrupt because of management mistakes until Bill Gates bailed them out and Steve Jobs returned to take them back up.

Microsoft was the high flyer of the 80s, but came back to reality when new competitors and because of management mistakes they missed the boat on innovation

Dell was unstoppable but because of management mistakes they missed the shift to mobile, and now need to be re-invented.

Shall we talk about the dominance of Nortel that went belly up because of management mistakes or Blackberry.  How about IBM who owned the whole computer space but because of management mistakes they decided that the PC had no future.  

What goes up must come down.  When you are in tech one mistake that misses a trend can destroy you.  Google, Facebook, Apple, and a bunch of others are bubbles. at some point they will make a mistake the bursts the bubble.  How far they fall will depend on how good they are at playing defense and finding new ground.  They might be like Nortel, or they might re-invent like IBM did.

As for earnings per share that is for the tourists...  It takes far more detail to evaluate the value of the shares.  What is the net asset value; the breakup value? The valuation takes analysis of the balance sheet; market position; inventory turnover; and an assessment of the asset quality.  EPS is the headline; and like all headlines it may be misleading.

I final measure is the quality of executive decision making.  People who don't make mistakes do not exists.  What needs to be evaluated is what did they do to recover and mitigate the damage from a mistake.

LVL 23

Expert Comment

by:Patrick Bogers
ID: 39736863
Interesting thought COBOLdinosaur, nice to read. Thnx
LVL 53

Expert Comment

by:Scott Fell, EE MVE
ID: 39736917
Very good point!

Author Closing Comment

ID: 39744360
Perfect comments

Thanks everyone

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