Author Topic: GOOGL - Google  (Read 475434 times)

Spekulatius

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Re: GOOGL - Google
« Reply #1950 on: February 04, 2019, 06:26:16 PM »
It had been over a year since I purchased some GOOG, but after hours I forced myself to pull the trigger on a small piece. There's some moderate "concerns" but Google is basically the new Visa. It's "everywhere you want to be".

All jokes aside, its core business remains moaty, and the growth is still there. Youtube IMO is really becoming a dominant piece of internet real estate. Whereas I view BRK as the perfect collection of "old economy" businesses, I consider Google to be the perfect collection of "new economy" businesses/assets. I dont expect massive outperformance here, but it's more stable and better diversified IMO than the FB's, AMZN's, AAPL's, and NFLX's of the investing universe. Only company(of the big ones) that I'd say is better situated is MSFT.

I added a bit during the last downdraft in December. At a roughly $50/ year run rate, it trades at 22x earnings (neglecting the cash) and in-line with the revenue growth rate.
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mjs111

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Re: GOOGL - Google
« Reply #1951 on: February 04, 2019, 10:41:17 PM »
On the conference call, Ruth Porat mentioned that R&D costs, capex, and hiring were all going to moderate continuing into 2019 compared to what we saw in this quarter.

Mike

Liberty

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Re: GOOGL - Google
« Reply #1952 on: February 05, 2019, 06:22:10 AM »
Also, the number of employee’s is up 23%’ a bit more than revenues. Same problem than FB, where costs are rising faster than revenues. I get the increased losses at Google ventures, but the margin and cost trends in the core business are a bit worrisome.

Apart from all the obvious stuff (want to catch up to AMZN and MSFT and be a real hyperscale cloud player), I think now's probably a good time for all these businesses to depress their profitability because of politics. Whatever they invest today in capex probably is pulled forward from the future. Amazon has gone through these cycles.
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meiroy

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Re: GOOGL - Google
« Reply #1953 on: February 10, 2019, 01:17:42 AM »
"So, starting with R&D, the main driver is our ongoing investment in engineers, in particular, in Google and then as I said, the sizable increase in accrued comp for other bets. And just to build that out a bit more, give you a bit more color, in certain other vets, employees are compensated through equity-based programs. And that's because we believe that this alignment of interests is valuable. We do assess valuation on an ongoing basis. And at a minimum, we do a formal valuation assessment once every 12 months or when there's a significant event.

And what you're seeing in the fourth quarter is the impact of higher valuation in certain other bets. And as we've talked about previously, a goal with the Alphabet structure is to enable us to build new businesses that would make a positive impact and create long-term value. And it's still early days. We're very excited about the opportunities we see. And so, what you're seeing is the impact here of valuation. The way we approach it is very consistent with the way start-ups are typically valued"

So basically what happened is that this is some tax planning one or more of the companies got higher valuation on paper and so there is some umm equity based compensation to attract and retain great minds, just like with start-ups.


cameronfen

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Re: GOOGL - Google
« Reply #1954 on: February 10, 2019, 07:18:56 AM »
"So, starting with R&D, the main driver is our ongoing investment in engineers, in particular, in Google and then as I said, the sizable increase in accrued comp for other bets. And just to build that out a bit more, give you a bit more color, in certain other vets, employees are compensated through equity-based programs. And that's because we believe that this alignment of interests is valuable. We do assess valuation on an ongoing basis. And at a minimum, we do a formal valuation assessment once every 12 months or when there's a significant event.

And what you're seeing in the fourth quarter is the impact of higher valuation in certain other bets. And as we've talked about previously, a goal with the Alphabet structure is to enable us to build new businesses that would make a positive impact and create long-term value. And it's still early days. We're very excited about the opportunities we see. And so, what you're seeing is the impact here of valuation. The way we approach it is very consistent with the way start-ups are typically valued"

So basically what happened is that this is some tax planning one or more of the companies got higher valuation on paper and so there is some umm equity based compensation to attract and retain great minds, just like with start-ups.

 This may be me being dense, but I'm not sure I follow what you are trying to get at?  Are you trying to say officers think google is expensive?  Or that this comp scheme is good? 

meiroy

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Re: GOOGL - Google
« Reply #1955 on: February 10, 2019, 09:04:46 PM »
"So, starting with R&D, the main driver is our ongoing investment in engineers, in particular, in Google and then as I said, the sizable increase in accrued comp for other bets. And just to build that out a bit more, give you a bit more color, in certain other vets, employees are compensated through equity-based programs. And that's because we believe that this alignment of interests is valuable. We do assess valuation on an ongoing basis. And at a minimum, we do a formal valuation assessment once every 12 months or when there's a significant event.

And what you're seeing in the fourth quarter is the impact of higher valuation in certain other bets. And as we've talked about previously, a goal with the Alphabet structure is to enable us to build new businesses that would make a positive impact and create long-term value. And it's still early days. We're very excited about the opportunities we see. And so, what you're seeing is the impact here of valuation. The way we approach it is very consistent with the way start-ups are typically valued"

So basically what happened is that this is some tax planning one or more of the companies got higher valuation on paper and so there is some umm equity based compensation to attract and retain great minds, just like with start-ups.

 This may be me being dense, but I'm not sure I follow what you are trying to get at?  Are you trying to say officers think google is expensive?  Or that this comp scheme is good?

My comment was about the increase in capex. The above was said by Ruth Porat during the earnings call.


saltybit

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Re: GOOGL - Google
« Reply #1956 on: February 12, 2019, 08:55:19 AM »
https://youtu.be/Q0nGo2-y0xY
Handling the long tail of self driving cars - lecture from a waymo ML engineer

WayWardCloud

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Re: GOOGL - Google
« Reply #1957 on: February 12, 2019, 06:41:48 PM »
https://youtu.be/Q0nGo2-y0xY
Handling the long tail of self driving cars - lecture from a waymo ML engineer

Thanks for sharing!
I've been watching several MIT videos by Lex Fridman lately (he has a great interview with Kyle Vogt as well).

As an investor, I tend to focus my interest not on understanding fully the technology but on trying to identify the beliefs of other market actors about it and whether they might be way wrong at times, because this is where the opportunity lies. So on self-driving cars there appears to be a huge disconnect between the opinion of many (a majority of?) people and the declarations of several, usually highly reliable, companies such as Alphabet, General Motors and others, who say they are quarters away from deploying massive uber-like fleets of vehicles in majors cities. This difference is what has gotten me bullish on self driving cars as an investment (I own some GM and GOOG).

Biases I am betting against I have identified on the other side of the trade:

- Some older people seem to not believe it's for real in the first place because similar technologies have been promised too much in the past and they have grown cynical. I call this the "where's the flying car I was promised by the year 2000 when I was growing up?" effect.

- Political beliefs. Now this one was my biggest surprise. I would have never expected that going from point A to point B safely, cleanly and faster than by foot could be politically charged for some people but oh god it is. There's lunatics attacking Waymo cars with shovels. Driving, for some people, seems to be an activity that defines their actual identity and worth so they feel threatened by the computer. (It seems to be the same people who hold dear against their hearts the freedom of polluting a lot).

- Irrational demands in terms of safety. If you read newspaper articles such as the ones reporting on a Tesla on Autopilot that crashed into a truck and killed its owner or the ones about that Uber self driving car killing a pedestrian - and if you talk about it with your friends and families - you'll see that the overwhelming majority of people think self driving cars should only be allowed on roads when 100% safe, which of course is impossible, instead of doing the correct reasoning of comparing their level of safety with the one of the average human driver. There's about 30,000 deaths each year in the US caused by driving accidents (they just don't make a newspaper article about each of those). If for example autonomous vehicles are able to "only" kill 3,000 then the rational thing to do would be to push for an as fast as possible adoption to save those 27,000 lives per year right away (and in the meantime the 3000/years will keep decreasing thanks to the technology getting better and better). But that is unacceptable for most people. This one irrational bias has very real implications and cannot be just brushed off like the first two because people influence laws through politicians who tell them what they want to hear so they could slow down progress and stall my investment from performing well even if I believe they are "wrong" about what solution SHOULD be deployed.

- Lastly, there's some engineers who object self driving cars being imminent who sound like they actually know what they're talking about and are definitely not falling into those biases but actually make good arguments. That category is the only one that really worries me some times to times and I don't know what to think about Anguelov's answer to that student's question at 59:05. He definitely knows his subject and he should if anything be biased bullish and yet when asked how far away actual mass deployment is he seems a bit uncomfortable and says "its not a technology you can just crank up" and "it will take some time"...
« Last Edit: February 12, 2019, 06:56:30 PM by WayWardCloud »

saltybit

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Re: GOOGL - Google
« Reply #1958 on: February 12, 2019, 10:02:28 PM »
Drago (the engineer) did get asked about his thoughts on how the future might look like.. it sounds like waymo will take a very measured approach

saltybit

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Re: GOOGL - Google
« Reply #1959 on: February 12, 2019, 10:04:16 PM »
https://www.cnbc.com/2019/02/12/google-cloud-ceo-thomas-kurian-google-will-compete-more-aggressively.html

Thomas Kurian’s first public comments as Google Cloud CEO..
His reputation in the industry is somewhat mixed - would be interesting to see what happens