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October 18, 2007

Google: Making the Bear Case

Not to give Google bears ammunition, but I thought I would do some left-handed writing this morning and give the critics some talking points. You can't truly be a bull on a stock unless you can make a stronger bear case than the bears can.

So, if you really wanted to make the bear case at Google, you would argue/do something like the following:

1. Point out in the most recent quarter financial services was almost certainly still the heaviest online ad spender. According to September figures, it accounted for 30% of ad spend, versus 25% for the next largest category.
2. Put up the top ten list of financial services ad spenders, which is a rogues' gallery of troubled companies: Experian, Countrywide, Low Rate Source, HSBC Holdings, E*Trade, Wachovia, Bank of America, and Capital One. Their stocks were off an average of 20% in the last quarter, and ad spending will almost certainly be cut further.
3. Sit back in satisfaction and wait for the bulls to come crawling with apologies.
4. Buy Google stock at $200.
   

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