What a day. We had a massive rally due to positive commentary regarding the portfolio insurers. GOOG misses earnings after hours and ISRG soars.
My longshot personal theory is that BIDU will overtake GOOG in stock price some time this year. Chances are slim but you learn eventually that anything can and will happen in the market. The catalyst might be BIDU's earnings report coming on February 13th. Remember, marketcap wise, BIDU is a $9.5 billion dollar company. GOOG is $170 billion - approximately 18 times as large. If BIDU can prove that it continues to grow at a much faster clip than GOOG, even at $500 a share, BIDU is still valued at 1/10th of GOOG's market cap. Understandably, revenue estimates at BIDU are about $500m for 2008, while GOOG's revenue is almost $17 BILLION, almost 34 times a large, so definitely there is some catching up to do and valuation is definitely the biggest risk factor here. However, BIDU's is estimated to grow at twice the growth rate of GOOG, and may still be accelerating, while GOOG's slope may finally be coming down a bit, as the US becomes saturated. China's internet user base is still in its fledgling stages as a proportion of population, and BIDU's search capabilities are still preferred by the chinese as BIDU continues to gain marketshare. This will continue to be an extremely interesting story to watch.
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2 comments:
Just wondering what your thoughts were on the dry bulk shippers. Since they've begun moving up with the BDI are they at a good entry point?
Also wondering what you think of ABK and MBI. Since it appears they are going to get some help are they worth picking up as well?
The charts look ugly for the dry bulk shippers. The sector is technically broken, and the recent run up could be a dead cat bounce to trap in more longs.
Also I'd stay away from the bond insurers, they are too much in the spotlight right at this moment. A lot of headline risk every day. Not to say they can't give a phenomenal return but I personally would rather avoid the entire finance group. In a panic/crash scenario is where I'd get interested.
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