I own shares of both these companies, and it accounts for about 25% of my portfolio all together. I am a little nervous now given that they will be going head on with iAd coming out, fighting over mobile ad revenue, perhaps cutting into margins for that specific sector(also competition in cellphones iPhone vs Android). I feel owning both of these, I might lose somewhere. I might have to take sides here. But given that the internet is only 14 years old and there are so many new users coming on in India, Brazil and Africa everyday, I can see the benefits of Google as there is no Baidu in either of those countries. But even in the US which is their main business, they dominate and are consistently growing revenues, not losing market share. So I want to open up the discussion to all of you and see how you guys would position yourself on this issue, as in who do you think will dominate, thrive and exceed expectations and why? Thanks.
apple - we’re in a ‘recession’ and they just sold 450,000 pieces of non-wifi plastic for ~$500 each. and they have new software planned for the summer season. apple is the new coke
Neither. Get rid of both as soon as you can. You’ll thank me.
I wish you wrote “My investments in Apple and/or Google” as this title as it took half a paragraph to read that as I really didn’t know the purpose until then . . . anyway - I like Apple and Google as concurrent investments; however, maybe Google a little more than Apple.
ps - - 25% of your portfolio is apple + google ? that sounds like a high risk/return portfolio - but if that is what you’re into then its all gravy
Apple and Google account for 25% of your portfolio? Talk about b@lls to the wall! I’d say both are heavily hyped, overbought, and overvalued. As for Apple, if their current business model of selling laptops at five times the cost of a comparable Windows-based PC and getting people to line up for anything with an Apple logo were to falter, their stock is in serious trouble. Apple is at the top of the game because their products are considered “cool” and that’s about it. How long do “cool” products last before the “cool” people move on to the next “cool” thing?
Google and Apple are both good companies and not really competitors, except that they’re both trying to eat Microsoft’s lunch. I wouldn’t fret about having similar positions in both.
I like the fact you put 25% of your portfolio into the two companies. shows conviction. a lot of ppl think its overvalued, but they’re using standard metrics of measurement p/e, p/b, p/cf. but i believe true value can’t be seen on the balance sheet, that would be too easy these days as everybody has understood balance sheet investing. I don’t want to comment on the stocks but its not my type of fetish. i still can’t picture how google makes its money and can’t operate the appl gadget. good luck.
We have our resident GOOG expert (timotimo). He knows everything you need to know about it. Ask him. You’ll be amazed with his wisdom.
Sell half your holding in both and invest in something else. That way you keep the exposure but don’t flame out should one of them make a balls-up.
mar350 Wrote: ------------------------------------------------------- > apple - we’re in a ‘recession’ and they just sold > 450,000 pieces of non-wifi plastic for ~$500 each. I have my doubts that we are still in a recession. When the National Bureau of Economic Research will eventually set the timeframe for this recession, I have a feeling it would determine it ended many months ago. But that’s for another debate.
“i still can’t picture how google makes its money” Advertising. It’s quite an old-world business model in that respect. Just the medium that is new.
“i still can’t picture how google makes its money” Search Google Adwords -> pure profit machine
So when I search for “hillary scott” and on the right, there are “ads”, that’s what google gets paid for? is that it? but the ads that appear inside a website is not google related then i suppose. who are the guys making ads and putting them in other ppl people’s website? i hear there is an “ad exchange” for this sort of stuff. apologize for the basic/stupid questions.
I don’t see that it’s one or the other, but I must admit that having 2 companies compose 25% of your portfolio seems risky. Is the other 75% composed of index funds, or cash, or what? Both companies have franchises that are difficult for competitors to replicate, so that suggests that they are more likely to grow faster than the cost of capital rises. Google is a web service, more or less, apple is a hardware company that uses software (mac OS usability) and app availability to create a brand distinction, plus they have a mystique of coolness and a cut of both phone fees and music sales. So although Apple and Google are both tech companies (and exposed to market and industry risk), within the tech industry they are not necessarily highly correlated. The implication is that it makes sense to hold both for diversification reasons. For the long term, I think Google is a good bet, given growth abroad. I think Apple might outperform Google in the short term, though, and it is not a bad thing to hold long term. One big risk with Apple is that Steve Jobs does have health issues and is not going to live forever… what would the company be if he should suddenly drop out of the picture?
I’m actually more concentrated than you. When I opened the position it was ~10%, but now its almost 35%. I haven’t added- just that I bought really low. Another 20 or so percent is in company stock. So basically I’m fulfilling two psychological traps… 1. Greed- can’t sell now! It will only go higher. 2. Home bias- I work hear so I know we are great and undervalued 
the rest is in muni and index funds. I haven’t reallocated in a year and starting to wonder if its time.
akanska Wrote: ------------------------------------------------------- >I haven’t > reallocated in a year and starting to wonder if > its time. uhhhhhhh…yeah
Frankarabia: I’ve a friend who works in adwords and search engine optimisation. I don’t understand it all that well, but suffice it to say there is huge money in this. If you google ‘hotels in Dallas’ you will see that the first two or three search results will be paid for ads. That’s expensive for the hotels who pay for that. If someone clicks on one of those links, google gets paid again. If someone goes through the ad and actually goes on to make a booking then it’s chi-ching GOOG! I’m no expert on Google or the risks inherent in the business model, but I can definitely see how it has become such a cash machine. Think how fast internet traffic is increasing and that Google is comfortably holding market share. Capex is fairly limited to keeping their enormous servers ticking over. OPM is circa 50% and it is only on 20x current earnings (not factoring in $25bn or so in net cash), so it’s not like GOOG is on 1999 multiples. I can see how people are comfortable to hold it at these levels.
I would short them both: AAPL: - stock is a mini tech bubble, just read some of the analyst forecasts, lol GOOG: - you can block 99% of their revenue with a ad blocker… both of these companies have unsustainable earnings and will plummet with just one missed earning call
timotimo Wrote: ------------------------------------------------------- > AAPL: - stock is a mini tech bubble, just read > some of the analyst forecasts, lol You mean these analysts? http://finance.yahoo.com/q/ao?s=AAPL