Some interesting points:
- financial advertisers account for more than a third of all web advertising, and as the plunging share prices of investment banks clearly demonstrate, the mortgage crisis is affecting a lot more than the mortgage sector.
- half of the top 10 were mortgage or credit-related marketers
- But the mortgage collapse could still be the start of a big cyclical downturn. Bulls like Rick note that Bankrate is doing fine, that TheStreet.com's ad sales were up last quarter, and that Google continues to chug along. But as the Bubble 1.0 collapse also showed, this logic is irrelevant: The Internet leaders did fabulously for five years through June of 2000. It's what happens next that matters.
- But the mortgage collapse could still be the start of a big cyclical downturn. Bulls like Rick note that Bankrate is doing fine, that TheStreet.com's ad sales were up last quarter, and that Google continues to chug along. But as the Bubble 1.0 collapse also showed, this logic is irrelevant: The Internet leaders did fabulously for five years through June of 2000. It's what happens next that matters.
- And online revenue doesn't have to collapse the way it did in 2000 for online companies to get hurt and Internet stocks to get crushed. It just has to experience a normal advertising recession.
Hmmm... just trying to think of a scenario in October where the teflon stock of our time reports dissapointing earnings. On top of all the other bad news that will be hitting at that time... hmmm... I hope a perfect storm is not brewing. September and October have traditionally had some of the worst single months in the history of the market. A bad report by Google? Could it happen?
I'm going to cut back my Google exposure a bit here, about 1/2. The stocks lack of movement in any of these serious rallies has been a bit troubling, especially with the strength in tech. Again, when in doubt, move to the sideline and see how things pan out. A full blown recession in 2008 cannot be good for advertising either. We are no longer in a growth at all costs era of online advertising - it will at some point turn a bit cyclical.
Long GOOG in fund; no personal position
5 comments:
Last Q showed that GOOG isn't impervious to missing earnings estimates. This current risk repricing trend and mortgage problems are affecting all kinds of surprising areas. It's certainly possible that financial services might at some point pull back on web advertising, which would without a doubt affect Google's bottom line.
Another thought that I haven't seen discussed very much is: With all the foreclosures that have happened to this point and the upcoming increases in ARM rates jumping, what is the likelihood apartment management companies like PPS or EQR will see a boost from people losing their house and having to take up apartment life for a while, even if temporary? This could be an area that might logically benefit from a mass of foreclosures.
As a side note, hooray for TSL (+4%) and JASO (+7%) today!
Imagine the psychology of the first miss by Google? (pure speculation) just saying...
re: solar - hooray for YGE too, too bad I had a market sell in before market so Marketocracy got me out of the position at the lowest point of the day. I left well over $1K on the table if I had just sold at 9:50 AM instead. Tragic! :)
I am lightening up more on TSL as I think top side is probably $48 right now.
Which ones are you in? Obviously JASO....
Market sells at the opening are tough.
In the solars, I only hold TSL and JASO. They have both been very strong. (I also had a terrible experience with SOLF...)
I'm also enjoying a run today with JADE. That's one Chinese growth company worth looking into, in my opinion - but it requires DD, not just a quick look at the charts or you won't get the whole story.
Funny. Were you on the SOLF finance board? I also had a terrible experience with SOLF. In fact before TSL had its huge run I bought SOLF since it was cheaper - then TSL went on a 150% run, needless to say I was peeved. I mean I REALLY overweighted SOLF in my porfolio and if I had chosen TSL instead I would of made about 3 years worth of gains in 3 months. I will never forget that SOLF. We have a cadre of refugees that went from STP to SOLF and now to TSL/STP on the boards - we all experienced it together - the days of morass in SOLF wondering why they were so undervalued vs TSL. Watching TSL rocket day after day and seeing SOLF do nothing. Small world.
No, I never posted on SOLF, it was a short-term trade that didn't work out. I've had much better success with JASO and TSL.
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