Google’s (GOOG) stock has been punished thus far in calendar 2010 falling more than 20% from its 52-week high. Some of that can be blamed on the recent correction, but with the broad market indexes just about even for the year there is obviously something more. Much of the pessimism towards the internet search giant is related to its pull back from the lucrative Chinese market after a throw down over censorship, and Google’s pain has been Baidu‘s (BIDU) gain as their shares have grown nearly 80% already this year. Some of this shift in valuation is certainly warranted, especially for Baidu, however we think that the reaction has created an opportunity to pick up shares of the global leader in search advertising.
A recent info-graphic provided through Barry Ritholtz’s blog shows the degree to which “googling” has gone global (all statistics are as of February 2010). In the US, Google claims an impressive 72% percent of search market share despite established competition. However, to the south Google’s market share is stronger with Mexico and all of South America hovering around 90%. Google has all but squeezed out the competition in such European countries as the Netherlands, Belgium, Latvia, Lituania, Hungary, Romania, and Poland all with greater than 95% share. Interestingly, as of the time of the report, Google only claimed 26% of Chinese searches, but 81% from India.
A recent report out of Google claims the company generated $54 billion in US economic activity in 2009, apparently this tabulation accounts for revenues generated through ads placed by on Google search results (as opposed to being Google’s own revenue). The report laid out the value proposition for using their platform, “We conservatively estimate that for every $1 a business spends on AdWords, they receive an average of $8 in profit through Google Search and AdWords.” It would seem to me profit is the wrong term to use in this case, but you get the idea; the platform works.
Clearly, internet search advertising is dominated by Google, and we have seen spending return as the economy has rebounded. We believe this trend will continue as keyword targeted advertising has become a key medium for small business ad campaigns, and economic recoveries are a time when many small businesses get…
This post is from Allan who wrote this for me after I asked him how his trading system works and what he’s doing with his newly launched newsletter, Trend Following Trading Models.
In case you’re wondering after reading this article, the daily chart on Google has a sell signal while the weekly chart is on a buy. So if you’re trading this system with a short-term time frame, you’re short, and if you’re trading this system with a long-term time frame, you’re long. And if you’re using the daily as a filter, as Allan does, you’re flat – meaning the divergence between the daily and the weekly is sending you to the sidelines. - Ilene
This morning I want to explain my Trend Models and how they work.
I started a newsletter service on January 2, 2010 and just a few days later the first stock trade idea was sent to the list, via my trend model system. Here’s the trade, featuring Google.
Thursday Morning, January 7, 2010 7:53 AM:
Trade Idea : Short GOOG
As you can see from the above chart, GOOG closed Wednesday below it’s trend line (solid navy line) and generated a SHORT signal @ 608. The previous signal was a LONG generated November 9, 2009 @ 562.
The early January SHORT was closed out on March 3rd at 545, for a gain on the trade of about 63 points:
That is pretty much the entire system, LONG above the trend lines and SHORT below them. The system works on all time periods, below is the GOOG Weekly chart:
You can see from the interaction of prices and the trend line how effective the Weekly trend is on being on the right side of GOOG. After the close each day I update the status of trends on Daily and Weekly charts for about 50 different stocks and ETF’s. They all are not as effective as the GOOG trends, but most are and even if you only traded GOOG (some subscribers do just that), you should be able see the benefit of knowing where the trend line is, either above or below prices, for any…
This post is from Allan who wrote this for me after I asked him how his trading system works and what he’s doing with his newly launched newsletter, Trend Following Trading Models.
In case you’re wondering after reading this article, the daily chart on Google has a sell signal while the weekly chart is on a buy. So if you’re trading this system with a short-term time frame, you’re short, and if you’re trading this system with a long-term time frame, you’re long. And if you’re using the daily as a filter, as Allan does, you’re flat – meaning the divergence between the daily and the weekly is sending you to the sidelines. - Ilene
This morning I want to explain my Trend Models and how they work.
I started a newsletter service on January 2, 2010 and just a few days later the first stock trade idea was sent to the list, via my trend model system. Here’s the trade, featuring Google.
Thursday Morning, January 7, 2010 7:53 AM:
Trade Idea : Short GOOG
As you can see from the above chart, GOOG closed Wednesday below it’s trend line (solid navy line) and generated a SHORT signal @ 608. The previous signal was a LONG generated November 9, 2009 @ 562.
The early January SHORT was closed out on March 3rd at 545, for a gain on the trade of about 63 points:
That is pretty much the entire system, LONG above the trend lines and SHORT below them. The system works on all time periods, below is the GOOG Weekly chart:
You can see from the interaction of prices and the trend line how effective the Weekly trend is on being on the right side of GOOG. After the close each day I update the status of trends on Daily and Weekly charts for about 50 different stocks and ETF’s. They all are not as effective as the GOOG trends, but most are and even if you only traded GOOG (some subscribers do just that), you should be able see the benefit of knowing where the trend line is, either above or below prices, for…
When Google finally ended the suspense, it did so by stating the obvious. "Figuring out how to make good on our promise to stop censoring search [in China]," wrote David Drummond, the company’s chief legal officer, on the company’s blog last night, "has been hard." For more than two months, ever since its Jan. 12 announcement that it would soon stop censoring its search results in the country with the largest number of Internet users in the world, the California giant was headed for a direct clash with the authorities in Beijing, who have been repeatedly unambiguous in their stance. Censorship is the law of the land in China, and Google had to abide by it or else "suffer the consequences," as an official put it last week.
Google’s decision is to route all of the traffic on its Chinese search engine, Google.cn, to its Hong Kong based site, Google.com.hk. The company has added simplified Chinese characters to the site (Hong Kong Chinese uses traditional characters for reading and writing) and a color-coded list of features (such as shopping, maps, music) which are still available, all of which make it now look "a bit like an eye test," as Shen Liling, a young Shanghai netizen, says. (See pictures of China mourning the potential loss of Google.)
But the practical result was that, for a few hours at least, search results were no longer censored. On Tuesday morning, March 23, in China, netizens could type in "Falun Gong," the banned religious cult, and what popped up was far different than what had come up just the previous night. (Among other things, the official Falun Gong website showed up in search results.) So after nearly four years of doing business in China, Google has lived up to its campaign promise. It is no longer censoring its search results for Web surfers behind China’s Great Firewall. But it took the Chinese government less than 24 hours to start censoring searches itself: a search for "Falun Gong" from the mainland later in the day prompted only a "Web page not available" response.
For that short span, the Hong Kong route was a relatively elegant solution to the dilemma in which the company had found itself. Xinhua, a…
Cisco’s CRS-3 router made a bit of a splash when it was announced on March 9, but the power of this new device hasn’t yet sunk in. Consider: The CRS-3, a network routing system, is able to stream every film ever made, from Hollywood to Bombay, in under four minutes. That’s right — the whole universe of films digested in less time than it takes to boil an egg. That may sound like good news for consumers, but it could be the business equivalent of an earthquake for the likes of Universal Studios and Paramount Pictures.
Most people are familiar with routers, or desktop boxes used to provide connectivity between PCs, laptops and printers in a home or small office. These are tiny geckos compared with theT. rexes used by telcos such as Verizon and AT&T to distribute data among computer networks and provide Internet connectivity to millions of homes and wireless subscribers.
As it turns out, these megarouters sitting inside data centers of major telcos and cablecos are among the biggest bottlenecks of the Internet, because as bandwidth speed to end users has shot up in recent years, router technology has not kept up, resulting in traffic jams that can slow or freeze downloads.
Cisco’s superrouter is expected to turn what is now the equivalent of a country road into an eight-late superhighway for Internet data traffic, including 3-D video, university lectures and feature films such as Harry Potter and the Half-Blood Prince and The Twilight Saga: New Moon. "Video is the big driver behind all this," says analyst Akshay Sharma of technology-research company Gartner Inc., noting that voice and texting will soon be overtaken by richer multimedia content and applications.
While it’s already possible to stream a feature film in real time, in the best-case scenario it takes about two hours to download to a personal film archive, at home or on a mobile device, for repeat viewing. With the predictable slowdowns and interruptions now so common, the process can eat up four hours or more of computer time — to say nothing of time lost managing the process.
But routers are not the only cause of bottlenecks, and Cisco is not alone in working to maximize the Internet’s full potential. Google is also concerned about the speed limitations imposed by wires that run to the home. Last…
Are "businesses" which aggregate user-provided content in order to serve adverts to those users "innovative?" Are they serving a "need" or attempting to contrive a new "need"?
While I usually present a specific thesis here, today’s topic is more a "work in progress" as I think through the paradoxes and connections between "needs" and contrived needs.
The two beginning data points are the South Pacific island nation of Vanuatu, formerly the New Hebrides, and an article from BusinessWeek on the dozens of Silicon Valley startups founded or funded by Google alumni: And Google Begat…The search giant’s former employees are seeding tech startups— and shaping another wave of innovation.
A friend’s son recently served a Peace Corps stint in a remote Vanuatu village. There is no electricity--illumination is provided by candles--and fresh potable water is a 2 kilometer walk away. The village pursues a generally traditional lifestyle apparently by choice; if you want to own a car and drive around in Western-style petroleum-based affluence, you can do so in the nation’s capital.
In the village, the women reportedly do most of the heavy lifting (agriculture, childcare, etc.) while the men have sufficient free time to brew up some hootch (kava) to enjoy in afternoon conviviality.
This "subsistance" is not poverty in the sense that people have enough to eat, shelter, some basic education, relative security from the predations of the State and/or external marauders (in our era, global Neoliberal Capitalism of the predatory/cartel variety).
This lifestyle is, with modest variations such as kerosene lamps or limited electricity, still lived by hundreds of millions of human beings. It is not to be romanticized or distorted by global-market, post-industrial definitions of "poverty." There are all sorts of poverty once you have enough to eat, a community and shelter, and definitions of a "good life" and a "better life" have to be carefully parsed.
We, on the other hand, are embedded in advanced, post-industrial Neoliberal Capitalism-- post-industrial in the sense that most of the nasty bits are performed elsewhere, so "we" get to live with high standards of environmental control, and Neoliberal in the sense that the Savior State is an active partner with global predatory finance Capitalism to exploit both foreign markets and domestic populations.
By the standards of our status quo, residents of Vanuatu are living at…
You may have your opinions about web video, but two numbers matter to me…5 (age of YouTube) and 17 (age of chatroulette founder). If you think we are anywhere but inning two, you just can’t handle the truth.
This industry is so young and moving so fast that my own Wallstrip seems like 50 years ago. In fact, our very first show was only 3.5 years ago (makes sense that $AAPL was our first show in a show about stocks and trends):
With an industry this hot and this early, it seems surprising that there have been so few hits and so little on innovation (pre-rolls for christ sakes still).
A peculiar side-effect of the current low-volume rise market dynamic can be seen by the curious price (and volume) action in investing public darling Google. When the market was climbing in the low volume days since November, the stock grew from $531 to a peak of $626 in 42 days, on average volume of 2.02 million shares per day. Then, when the selling started, the volume picked up by more than 100%, with daily average volume of 4.7 million shares, while the decline in the stock to the onset price of $531 took less than half the time, or 19 days. Such are the vagaries of the VWAP unwind, as algorithms seek to reverse to a longer and longer mean. Google demonstrates very accurately what would happen to the stock market should there be a real, exogenous selling catalyst. Now consider that the S&P’s VWAP since the March lows is around the 950 level. If the market is unable to sustain the most recent relief rally, and if this is coupled with geopolitical news or a default the PIIGS or some other unpredictable event, expect a very prompt but highly doable correction. If the market volume doubled and the time of decline was cut in half relative to the rise, consider what would happen if all mutual funds suddenly switched from a buying to a selling posture… And what this would mean for the final closing level on the S&P of that particular D-Day.
Prince Alwaleed has given Vikram Pandit one year to shape up or else.
I wonder what sharia has to say about investing like a doofus, throwing more money on a losing position, and then expecting common taxpayers to bail you out.
"Last week, Alwaleed boosted Kingdom Holding’s balance sheet by transferring $600 million worth of his own Citi shares onto its balance sheet. Shares of the investment group — of which Alwaleed is a 95% owner — have lost about half their value since 2007 and it’s had capital losses of 65% as of the end of the third quarter. The transfer of Alwaleed’s Citi shares should help secure its borrowing capacity, and it also means that the Citi shares aren’t going to be sold anytime soon." Citi and Its Princely Problem
It appears as though the Prince’s investment empire is on shaky ground.
No wonder Vikram Pandit has been noticeably absent from such recent, unimportant meetings like those with the President and the Congress.
Business Standard India Perform or perish, Saudi Prince tells Vikram Pandit Washington January 16, 2010, 14:05 IST
Saudi Prince Alwaleed bin Talal, who is a major shareholder in the Citigroup, has told the bank’s Indian-American CEO Vikram Pandit that his two-year honeymoon is now over and 2010 is a make or break year for him.
"I don’t threaten those CEOs that I meet but I told him (Vikram Pandit) that the market gave you two years’ leeway, but I think now it’s time to deliver and 2010 for him is really the year to make it or break it and he has to deliver," Alwaleed said in an interview.
Alwaleed had recently met with Pandit and he had told him that he must deliver solid results in 2010.
"It’s very important… For the shareholders that have been very patient with Citibank that the honeymoon is over now; two years is enough and I think he will deliver in 2010," Alwaleed said.
At the interview, the Saudi Prince also acknowledged that China is an economic power and eventually, it would translate that into political power.
"China is a rising power. For sure now, China is amassing huge power economically, financially, not yet politically, but I think eventually it is
Google is being widely hailed for its announcement yesterday that it will stop censoring its search results in China, even if it means having to abandon that vast market. After years of compromising its own ideals on the free flow of information, the company is at last, it seems, putting its principles ahead of its business interests.
But Google’s motivations are not as pure as they may seem. While there’s almost certainly an ethical component to the company’s decision—Google and its founders have agonized in a very public way over their complicity in Chinese censorship—yesterday’s decision seems to have been spurred more by hard business calculations than soft moral ones. If Google had not, as it revealed in its announcement, "detected a highly sophisticated and targeted attack on our corporate infrastructure originating from China," there’s no reason to believe it would have altered its policy of censoring search results to fit the wishes of the Chinese authorities. It was the attack, not a sudden burst of righteousness, that spurred Google’s action.
Google’s overriding business goal is to encourage us to devote more of our time and entrust more of our personal information to the Internet, particularly to the online "computing cloud" that is displacing the PC hard drive as the center of personal computing. The more that we use the Net, the more Google learns about us, the more frequently it shows us its ads, and the more money it makes. In order to continue to expand the time people spend online, Google and other Internet companies have to make the Net feel like a safe, well-protected space. If our trust in the Web is undermined in any way, we’ll retreat from the network and seek out different ways to communicate, compute, and otherwise store and process data. The consequences for Google’s business would be devastating…
Improvement in first time unemployment claims is slowing. Actual, not seasonally manipulated data, including an adjustment for the usual weekly upward revision, shows that the year to year rate of change is on the cusp of a possible upside breakout, which would be good news for stock market bears if it happens.
Initial Unemployment Claims Chart- Click to enlarge
Here’s why it’s mind blowing. I’ve plotted it below on an inverse scale with the S&P 500 overlaid.
Unemployemt Claims and Stock Prices - Click to enlarge
Major US Markets including (NYSEARCA:DIA), (NYSEARCA:SPY), (NASDAQ:QQQ), and (NYSEARCA:IWM) dropped over 3% each on Italian bond fears and an increased worry that Europe will not be able to bail out its 4th largest economy. Furthermore, the iShares MCSI Italy Fund (NYSEARCA:EWI) wiped out over 9% today, further illustrating the dire situation in Italy and the European Union: ...
The second economic disappointment of the day comes from the Dallas Fed, which dropped from -2.0 to -11.4 on expectations of -9.0- this was the 4th consecutive negative print month. The report was, in a word, horrible, with just 2 of the 15 constituent indices posting an increase, and the bulk solidly in the red, led by Unfilled and New Orders which dropped 16.8 and 11.2, respectively: not good for economic growth. On the employment side there was nothing good either, with both employment and hours worked declining by -...
Bloomberg reports that Diana Containerships (NASDAQ: DCIX) files to offer stock up to $172.5M. Diana Containerships says that Diana shipping will also buy $20M of stock.
Top 5 RisersStockRatingAnalysisVLOSTRONGBUYAn increasingly positive growth rate of past earnings, along with improving expectations for long term growth, make Valero a good prospect for high returns.KROSTRONGBUYKronos Worldwide has been gaining recognition from analysts as a good canditate for achieving higher than expected earnings along with higher overall projected valuation.SFIBUYiStar is one of the top candidates projected to achieve both higher than previously projected earnings in the short run and a higher earnings growth rate in the long run.AMATSTRONGBUYApplied Materials has been...
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February is now past, and the Biotech Porfolio is loaded with winners and a miss (PLX). MRK is down a bit, but I expect that trade to recover, and one could be more agressive and double down on it, or play another round at the Jan13 $30 options for roughly the same price. Below is the summary, and note the grey boxes are ones that did not fill. I am still a fan of BMRN, and like DEPO as well. Now let's look at a few others.
Table 1. PSW Biotech Plays Since January 2011
 
Our newest play is Momenta Pharmaceuticals (MNTA), who is pursuing a three-part business model which includes complex generic equivalents in partnership with the Sandoz division of Novartis, proprietary compounds, and follow-on- biologics (FOB). It seems that this company is tied up in competition/litigation wit...
Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...
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Cisco’s CRS-3 router made a bit of a splash when it was announced on March 9, but the power of this new device hasn’t yet sunk in. Consider: The CRS-3, a network routing system, is able to stream every film ever made, from Hollywood to Bombay, in under four minutes. That’s right — the whole universe of films digested in less time than it takes to boil an egg. That may sound like good news for consumers, but it could be the business equivalent of an earthquake for the likes of Universal Studios and Paramount Pictures..jpg)
Prince Alwaleed has given Vikram Pandit one year to shape up or else. 
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Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...
Ilene is editor and affiliate program
coordinator for PSW. She manages the Favorites backup site
(