Are you buying more AMZN or just holding? I'm in at the low-40s, considering getting in further. Short term may be a rollercoaster, especially on their retail end, but very confident in their long term strength.
Still long on GOOG (cost: 300).
Don't and won't own AAPL at this point. Trading based on emotion may be a bad thing, but the way they have handled Jobs' health issues makes me weary. I understand their overall opaqueness, especially regarding product, but this is a significant corporate issue, and I can't be confident in a company that seemingly isn't being straight with its shareholders.
fredwilson
· 11 months ago
Holding AMZN for now. I don¹t love the market dynamics right now. I think it¹s going to test the Nov lows at some point this winter/spring.
DanBlank
· 11 months ago
I am quite surprised Fred. When you talked about your enthusiasm for these companies, and your belief in their long term growth, it always seemed to support a larger belief in technology, and of course, that your research would be proven in the course of years, not months. And similarly, that the time to buy and support your beliefs is when everyone else is panicking, and to sell, when everyone has stars in their eyes.
I know about as much about investing as the next guy (meaning: NOT MUCH!), but always found myself attracted to investing strategies that moved away from quarter-by-quarter mood swings on stocks. I can't help but feel that judging success and failure in this time frame has an overwhelmingly negative affect on many aspects of business.
But this is not my money - this is not my research - and this is not my life. Thank you so much for sharing your enthusiasm and thoughts on these companies/stocks over the past year. Many people keep their investments private, so its nice to hear your thoughts on them.
Have a nice day. -Dan
fredwilson
· 11 months ago
good points Dan. I am not walking away from my investment thesis in Google, and plan to be back into the stock during this year. I just feel like I should take some gains, take a breather, and look for proof points that my thesis is correct before diving back in.
mrcai
· 11 months ago
That last part reminds me of something I read in Nassim Talebs Black Swan. Wouldn't now be a good time to look for proof points that your thesis was _incorrect_ before making the next move? :)
As has been said, thank you for sharing.
TMC2K
· 11 months ago
when $goog comes down again, then you should consider selling puts. I'm not sure that would be a good strategy for short-term timing. But it would have worked well for you over the past few months based on your objectives.
fredwilson
· 11 months ago
I keep hearing that. I think I'll give it a try.
fredwilson
· 11 months ago
I¹m convinced. I am going to do that when I start getting into google again
Nicolas
· 11 months ago
I totally agree with you about Amazon. It's been 1 month I have been hesitating to get some AMZN stock and it keeps going up. The only thing that scares me with AMZN is the High P/E ration. It is now around 40. Isn't it too high?? Anyway thanks for your blog and thanks for sharing your thoughts on stocks.
Christian Cadeo
· 11 months ago
For aapl, I can't say I disagree as unfortunately the Jobs premium is still baked into the stock even at these levels.
For goog...Huh? That sure is an abrupt change from your position early this year which was grounded in some solid analysis. Obviously I don’t know the full context of your discussion with these investors, but it sounds like your rationale in selling is driven by trying to market time. To be frank you are not really good at this as if you were you would of added more at $250 and exited now (Yes this is meant as a humorous point).
Cheyne
· 11 months ago
I absolutely agree with you here about AAPL. I don't see anyone having any real confidence in this company's future. I can see large investors being bearish on this stock and staying away out of caution, which will ultimately hurt the price over time, no matter what their current quarterly earnings look like. The doubt will always be there unless they can bring up another public face for the company who can show great leadership and innovation.
Christian Cadeo
· 11 months ago
I would say the lack of confidence pertains to Jobs and not necessary the company as a hole. For all intents and purposed the company is firing on all cylinders with Macs and the iPhone.
Cheyne
· 11 months ago
It could be argued that the mac and the iphones success were the direct result of steves leadership.
Nathan Bowers
· 11 months ago
I love Apple, but I agree that the long term doesn't look good because no Steve Jobs successor can be Steve Jobs.
kidmercury
· 11 months ago
this is great news. let the others fall for the bear trap. it's a trader's market for at least the first half of the year, probably a lot longer.
some of the best commodity buying opportunities for buy and holders IMO are happening now, though. and of course, let us not forget the golden rule: he who has the gold, makes the rules!
Jason Kolb
· 11 months ago
I think you've made some very prudent decisions there. I don't know how much you pay attention to economic news, but 4th quarter earnings promise to be the worst in history--I'm sure you could pick up just about any stock you want much, much cheaper in six months or so.
FWIW, I'm not planning to buy stocks until we start to see economic recovery, there doesn't seem to be much of a point until then, might as well make 2% on a CD or Treasury.
Drew
· 11 months ago
Fred - I know I'm just being a pill but if you'd bought NDX (QQQQs) instead of those individual names you'd have done just as well. It's really tough picking stocks unless you have inside info. And in AAPL's case even the outside info hasn't been straight.
AndyFinkle
· 11 months ago
We both know that one (me OR you) can easily paint a bullish or bearish picture of the aforementioned stocks. Longer term, I would argue you would agree that the case made would be a much more bullish one.
So suddenly you are now a market timer, because you had dinner with a bunch of market timers? If you had gone out to dinner last night with a bunch of VC's who specialized in biotech, would you come into the office today and start looking at bio deals??
Changing your investment strategy mid-game just sounds so wrong in so many ways. Don't get me wrong I believe that the era of "long term investing" is dead, but com'on, you make 1-2 points in a month and will now tell the market it will correct? Seams a little TOO much of an extreme. If you need to throw the market gods a bone, perhaps sell half your positions here...
alain94040
· 11 months ago
Agreed. Disappointing.
Josef
· 11 months ago
I was motivated to get out for similar reasons, but did it at the end of the year to try to recoup on taxes. Your in a diff financial position than I am so the tax thing may not be that big a deal to you.
CoryS
· 11 months ago
Think you're right on, probably about a month or so ahead of the peak based on Mauldin's post last week (worth a read: http://tinyurl.com/7a63mx ):
"We both see a very tradable rally going into spring. Then, when we get even more earnings disappointments at the end of the first quarter and warnings at the end of the second quarter, we could see another test of the November 20 lows. Earnings disappointments are the catalyst for protracted bear markets. But the wild card is the coming economic stimulus package. We have never been in a situation like this."
Sounds like boring investment grade corporate bonds are the play of 2009. Happy hunting.
Facebook User
· 11 months ago
re: apple
This is why I typically ignore your stock comments. You provide no rational reasons beyond emotion on why you invest in a stock. Saying that since Jobs return - Apple has ALWAYS been secretive - Jobs even more so. You've just figured this out now? In addition - you don't like several of their business models (just recently on twitter - you bitched about how iTunes lost you day one - whatever that means). So you seemed to have bought and sold the stock on a purely emotional basis. The wrong reasons to invest in anything.
(don't presently own the stock but I will say this - Apple continues to do something that other companies have not been able to do - deliver product in a consistent and reliable basis - something that will continue with or without Jobs)
kidmercury
· 11 months ago
boss do i need to put this hypocritical clown who hates on you for allegedly being overemotional while launching an overemotional, completely unjustified assault on you?
say the word boss and i'll drop a video comment puttin' the haters in their place.
nope. all comments are accepted and welcome here at AVC!
tim is right that investing based on emotion is a bad idea
kidmercury
· 11 months ago
lol, sounds good. i'll retire the bouncer joke, though say the word and i'll bring it back in no time.
jerome camblain
· 11 months ago
Fred,
You are right to get out as you were wrong to get in in the first place...If I may, allow me few points from snowy France: - I am surprise you exit before the president elect you support has a chance to prove anything - bottom fishing is a good strategy for eskimos, not investors - as a techno pro, your job, income & assets are linked to the technology stocks. Volatility and correlation move in tandem. Why do you want to add any corrolated risk to your holdings? Run for diversification with uncorrolated assets such as wine or else. See my post on this matter: http://camblain.over-blog.com/article-26505668....
Can you go a little deeper into your AMZN thought? Cloud, Kindle, services?
fredwilson
· 11 months ago
All of them, but mostly the vision he¹s showing and the platform he¹s got
SamJacobs
· 11 months ago
I feel like the Xmas/Holiday season was a critical and aggregating inflection point for AMZN. They continue to be an impressive company.
Damon
· 11 months ago
Smart move on Google. Believe it or not, DCF analysis still works for large public companies, and any rational analysis of future cash flows will put GOOG's value no higher than the mid 200's, and a good bit lower if you factor in some rough times ahead. It will get cheaper.
Have you read iWoz? If you can do that and still believe the things Jobs says, your just not paying attention.
andyswan
· 11 months ago
Good trade. GOOG will probably print 100's. When earnings AND multiples contract, things get fugly.
Disclosure: I've been extremely bearish on online advertising for the past year and expect that unlike Sinatra....the worst is yet to come.
jerome camblain
· 11 months ago
Fred I just proof read my comment and found my tone a bit rude, sorry about that. I just wanted to advise you to take less risk. Take care
fredwilson
· 11 months ago
Thanks Jerome
I appreciate the comments and the advice I am getting from everyone this morning
nickfenton
· 11 months ago
Well thought out, and logical. Plus there's a little "gut feeling" in the mix, which is never a bad thing when making decisions on your positions.
John Mills-Pierre III
· 11 months ago
Very interesting perspective. While I respect your decision to divest and teach Apple a lesson, the best investments are those free from emotion. The IR team is in a bind - it cannot discuss this man's personal health. The bigger issue is do you truly believe Apple would fall apart if Jobs left? I think its product, sales/marketing, and partnerships are more relevant than anything else. Though nothing short of a genius, Apple is greater than Steve Jobs at this point. However, I agree with you on the manipulation of truth. However, ALL companies spin stories in their favor. TRUST.
Don't cut your nose to spite your face. Happy 2009, John Mills-Pierre
Pete
· 11 months ago
@John Mills-Pierre - re: Apple falling apart. In "Art of the Start", Guy Kawasaki makes some good points about innovation in large companies, and uses Apple (where he worked) as an example. He asserts that without Jobs, there would be no Macintosh, a game changing innovation compared to the Apple II line. Whenever I read an article about Apple, it talks about how Jobs personally drives innovation and design at that company. He's well known to be a control freak. Witness Apple's performance under Sculley...dismal. Then Jobs come back and we get the iPod, iPhone, iTunes, and Appstore.
I wouldn't want to be an owner of $AAPL without Jobs at the helm.
Chris Dodge
· 11 months ago
Sorry, I have to disagree. I'm not one to gush needlessly, but I've been completely amazed at Apple for the past two years. I can understand your suspicion of the Job's health PR, but - as a company - I think they are very well positioned (due to the dominance of their brand name/recognition/respect). If Apple does indeed release a large format iTouch, it'd certainly give Amazon's Kindle a run for it's money.
I say this as someone who has been recently won over. For a number of years I've been a Digital Media technologist and one of my projects was one of the early Video Download/Streaming services This was all way before iTunes moved into Video. However, the Services that I was involved were gradually shut down as once Apple got into that game (along with Amazon), it was game-over for small-time players. So I've always had a bone-to-pick with Apple, since they are the 800lb. gorilla in the industries that I work in. But I've learned to tip my cap to them since then.
I hope they do release an iTouch as I'm working on some mobile enterprise apps that would be a perfect match for a slightly larger format than the iPhone.
With regards to the stock price and my instincts in terms of where it's going to go - honestly I don't know and I don't have a stake in it. As long as Apple focuses on executing its vision and less on stock market volatility, they are going to do just fine. I also think that the Blueprints for mid-term product roadmaps have already been set and I don't think Jobs is quite the can't-live-without person as much as he was to get them over the hump.
Jim Goodlett
· 11 months ago
Fred, good on you for the share...and quite agree with actions, but for different reasons...
$AAPL's cash horde gives it breathing room to weather the downturn, but does little to placeate market watchers, traders and institutional investor who think they are missing the boat on important verticals amidst high competition...i.e., the MacWorld 'big idea/announcement' being a US$2799 laptop when the market is shifting to lighter.cheaper.mobile computing that is redefining the space (netbooks to do 50M+ in 09 as one example), as well as no new mobi.iPhone products to stave off the rush of viable products that do more and are easier to use for the business/power/tweening users who need a physical qwerty keyboard because the mobi's are becoming the netbooks of tomorrow...anyone using a HTC TOUCHpro, or the reportedly.rumored forthcoming HTC built Palm device will tell you that although iTunes lock-ins are cool, times they are a changing (nevermind touchscreen products from LG, Samsung, and BBerry)...when the lost Rubenstein to Palm, most ballyhooed that they lost an innovator, while I looked at the rise of a competitor...after MacWorld I sold recent positive positions in $AAPL...
as to $GOOG, any day you can make money off of a stock that has free fallen from stratospheric internet bubble day euphoria pricing, is simply a good day...name one other stock that has bulls lowding the buy on a company that has dropped from US$659.96 to US$247.30 in 52 weeks wiping out massive market cap and investors funds while continuing to display no cohesive strategy on how they will monetize their portfolio of overpriced buys...gravity for some odd reason appears to be suspended for the moment...I also sold short term positions for positive results.
as to $AMZN, they continue to innovate and better yet partner with everything from bit players to sizeable market movers...from the pundits pointing to $AMZN being the reason that iTunes now has variable pricing, as well as its recent VOD (Video On Demand) product.partnerships, to 'best buys' availed for the masses buying product in its multiple verticasl, $AMZN was a strong recommend at its mid November price of US$34 which is where I got in...though in these rolling market, I'll stay the course till sunsets of US$70-75.
thanks again for your discuss...
Jose Paul Martin
· 11 months ago
I'm with you on Amazon, I've always felt comfortable with its model, and Bezos leading it.
An insight into where Amazon's sales is coming from would be interesting. I'm just curious as to how much is coming from outside the US. I for one (and like many in Bahrain/Dubai), buy things regularly from Amazon, have them Aramexed (www.Aramex.com - the Middle East Equivalent of Fedex) to me. The cost of buying online, shipping is still cheaper than buying stuff from the stores here!
Google no doubt has made its impact on our lifes, with cloud computing, Gmail has become a digital nervous system - and even if Google were to charge or some free/premium model, I'd guess that many would be willing to pay for it! Google knows how to prototype, kill the weaklings and run with the winners.
Apple. I'm a Mac fan, so my answer would be biased!!! Good health to Steve!
Jeff Osmond
· 11 months ago
So when is Fred Wilson launching the rational thinkers hedge fund?
awatterson
· 11 months ago
I think it's interesting that you are taking opposing approaches to sell and buy decisions. While you slowly built up your positions in these companies over time, it seems like you are dumping them all at once. Is there are reason for the different theses?
fredwilson
· 11 months ago
That¹s a good observation and question. The decision to sell appl is based on losing trust and I think that¹s a binary thing. When its¹ gone, I should be too. The decision to sell google all at once is kind of odd and I probably should have done it over time.
Michael F. Martin
· 11 months ago
Good companies, but not as cheap as some other good ones right now.
gruvr music map
· 11 months ago
Bravo Fred! I hate to see people lose money but they do because taking a loss is one of the toughest things. Personally my strategy is to set a trailing stoploss once a position is in the green and let it ride, but getting out simply because you're betting against the trend and the chart is perfectly rational.
I'm still short GOOG from $399 as a hedge against collapsing internet ad revenue, which I am sure you can observe by polling your portfolio of web companies. It's a lot like 2000 out there right now and I think GOOG is going to get a huge surprise in its next Q earnings.
fredwilson
· 11 months ago
Well I am going to watch the Q4 earnings call with a lot less anxiety now :)
gruvr music map
· 11 months ago
true.
Now you *could* join The Dark Side and get short MUAHAHAH... just use a dang stoploss.
The thing about web ad revenues, as I recall painfully from '00, is they are chained together by arb - i.e. many sites which get adsense revenue get their traffic by buying adwords (or what have you)... so when $ starts to dry up for those sites, the entire pyramid comes down far and fast.
Another anecdotal observation: seems like lots of adsense ads I've seen in the past month are 'filler' ie promoting youtube or other google properties. They only run remnants like that if they have no other $ inventory. Interested whether others have noticed this also.
But hey, shorting isn't evil - it's hedging if you depend on things like adsense. Heck even farmers do it..
howard lindzon
· 11 months ago
dude...i was hammered last night. i said that?
TMC2K
· 11 months ago
Very solid move. I think the market action today reflects thinking like yours in general.
I also firmly agree with your position on $aapl and $goog for exactly the reasons you mention. Also $aapl has introduced big notebooks at a time when the market is demanding netbooks. They may have made their first product strategy error in years with this. Netbook popularity may not ultimately be good for $aapl
I also think you've nailed in on $AMZN They are one company positioned very well for the developing internet.
druce
· 11 months ago
Your GOOG trade, wonder if it went through at your limit... now it may be a good trade and it may be a bad trade, I can't really tell without asking a whole lot of questions. How did you originally select GOOG as something with good risk-reward profile? What was your rationale for buying it and what changed? How did you pick your entry point? How do you control your risk on the individual trade, and on the whole portfolio? You talk about why this exit point, but it seems specific to this situation, so what are the general criteria for exiting? most important, what is your overall edge against the market? (asking rhetorically, but maybe worth exploring in future posts)
There's a guy with a pretty good post about how poker taught him everything about business, and sometimes I think maybe I could write an even better book about the analogies between poker and investing (and a few important differences). A poker amateur runs into a poker pro (maybe Harrington said this) and invariably there's some hand that gutted him that he's been agonizing about for weeks or maybe years. "One time I had ace, ten. I flopped two pair and made a big bet. Then the other guy came over the top and I called. Then" yada yada yada until he gets gutted. "Did I play it right?" And the poker pro asks, where were you seated and where was your opponent? How many callers pre-flop? What were the stack sizes? And so forth, and the amateur, says hey, I don't know, just tell me what you would have done already!
That's why I'm not a huge fan of stock chat - without knowing an incredible amount of stuff about where the participant is coming from, what his strategy is, risk tolerance etc., what expertise they have, what work they did, it's really hard to determine if anyone knows what they're talking about. And you will lose your shirt if you listen to people, or think you're one step ahead of them, and you trade against the market that is two steps ahead of you.
Now one of the interesting analogies with poker - a big part of the game is to get in situations where you stand to lose a limited amount if you're wrong, and a much larger or unlimited amount if you're right. When you're adding on the way down, and cutting the position quickly on the way up, that's potentially putting you in the position of cutting your winners and letting your losses run, and having optionality work against you. Also, when your edge is deep industry knowledge that will win out in the long run, when you try to time the market you risk that positive earnings surprise and a big pop, and then wondering if you chase it or risk missing out.
On the other hand, when you put yourself in a position where you can add to a position on the way up, but put in a stop so you can only lose a little or even not lose at all on the way down, that's a good place to be. So that's the way I am inclined to play GOOG for now.
fredwilson
· 11 months ago
Great comment Druce
I¹m a total amateur in the stock market and have said so on many occasions.
That¹s why the vast (like 99%) of the money that we have at risk in the markets is managed by pros.
The stuff I do myself and blog about (and run through covestor) is largely about being able to put my money where my mouth is
I felt that the market had overdone it on google, amazon, and apple in late oct and early nov and so I put some money down to prove it
Now I feel a bit differently and that¹s why I sold the stock and posted about it
druce
· 11 months ago
don't misunderestimate yourself LOL.
you have an edge based on deep understanding of the industry that tells you when stuff is undervalued ... but short-term mean reversion trades might not take maximum advantage.
GOOG - pretty great company in a pretty great industry AMZN - great company in some not-that-great industries AAPL - great company but hard to value - Jobs succession, iPhone accounting and whether growth is sustainable or hit-driven
then again that other post I just wrote makes me think none of that matters and I should sell everything LOL.
fredwilson
· 11 months ago
I am almost there Druce. I¹ve just got amazon and ntdoy, not sure why I still have ntdoy
Might sell it today
Alex Iskold
· 11 months ago
Fred,
I have do disagree with you on $AAPL.
Okay, yes, Steve is sick. So what? He built an incredible execution machine that is doing amazing things. True, its not cool for Apple PR not to be straight. But this is typical Jobs. He is neurotic, egocentric and very private guy. He just doesn't want people to know.
But just like its not cool for him to hide things, its not cool to sell stock because CEO is sick. It does not feel like a value investment, feels like a gamble instead. Apple's execution for the last decade is unprecedented in the industry, IMO and its not just Jobs that did it. He is important, but I am sure that Apple folks know what they are doing.
Of course I am being critical (hypocritical?) without much base - I do not own the stock, but wanted to give you my 2cents on this.
Don't give up on $AAPL, they need the support of people like you now more than ever. I mean this whole heatedly, because Apple's take over laptop/desktop market is in progress.
Good pick on AMZN though!
josh guttman
· 11 months ago
Heard Howard's rationale and wasn't compelled to sell. He's more of a trader than me, and I suspect most people reading this blog. I think q4 iPhone sales will be strong and now DRM-free iTunes and new laptops? I feel good about Apple. The big question - what is the Jobs discount factor? 5%? 10%? 20%?
firebones
· 11 months ago
On the three: my opinion is that AMZN and AAPL have quality management teams and quality strategies; GOOG's team is not yet proven --they've had a major wind at their back throughout their lifetime and this is the first real test they've had in rough waters. For AAPL, 2009 will see them 1) withdraw into their shell through the downturn (no major new retail-dependent game-changing launches of note, but lots of development for the future, and some launches held back for better economic conditions) and 2) weather the storm of a Jobs death or transition. Both of these conditions are temporary for AAPL--they're fundamentally strong as a money engine. When all the bad news is out by later this year, the depth of their management plus their strategy will make them a buy, but we may have to see the 60s first. AMZN is just solid. I'd avoid GOOG until they show they have some evidence that they have a strategy to keep the growth going while going through a prolonged downturn.
My AAPL buy signal is the day after "news" that Jobs is gone, provided that the stock is painting 60s the day after the news comes out. That's not priced in yet, and I don't think it changes anything substantial about the company.
fredwilson
· 11 months ago
This is a great way to think about it
I am hoping that google¹s management shows it¹s maturity and does the right thing this year
jonathanmarcus
· 11 months ago
I penned the following about Amazon 8 months ago:
Microsoft and the Media are focused on the wrong target. At $31, Yahoo is being valued at $45 BN. Assuming a 40% acquisition premium, Amazon also costs $45 BN.
Amazon Web Services (AWS) launched in 2002, and has revolutionized the entire Internet infrastructure model. AWS disrupts storage, hardware, hosting and content delivery markets, and is increasingly the most strategic service for thousands of Internet services. The AWS team is outstanding. Rackspace, Joyent and Media Temple provide small-time competition, and Google only released App Engine in 2008, giving Amazon the undisputed leadership position in utility computing.
Amazon has spent the past several years developing emerging leaders in digital downloads. MP3 is more open and flexible than iTunes, the Unbox + TiVo integration represents an important implementation in the Set-Top / TV services market, and the Kindle appears to be exceeding Amazon’s internal projections. Digital technology continues to impel fundamental change in media distribution, and Amazon is well positioned.
In retail, Amazon has the most comprehensive user-generated review database and Prime ($79 = free 2-day / $4 next-day shipping), the cost-effective answer to many Internet shipping problems; the alternative is a Big Box experience and $4 gas. Ultra-competitive prices and the most diversified inventory (1st + 3rd-party) make Amazon the online Wal-Mart. Why use a comparison shopping engine when Amazon offers everything at great prices, in one location, with convenient service?
You couldn't have been more right on Apple. Looks like they have been totally dishonest with the public. Good for you for selling when you did.
fredwilson
· 11 months ago
I have to thank my friends who helped me make that decision
AnujMathur
· 11 months ago
This post led me to discuss the issue with some medical professionals, who echoed your sentiment, and suggested a diagnosis similar to what we're seeing in the press today. That said, at least a part of the story behind Jobs has been priced in (although we cannot be certain to what extent) - what are you looking for before jumping back in?
fredwilson
· 11 months ago
I¹m not jumping back in.
I got out because of distrust of the company and that isn¹t solved by time or events
henryyates
· 11 months ago
Great call re Apple. Pays to follow your instincts and actually transact on your gut feeling.
fredwilson
· 11 months ago
Its the last part, transacting that's always hard for me
henryyates
· 11 months ago
Me too. Human nature I guess. Harder when it is not your "main" job.
srw
· 11 months ago
Don't know about AAPL, but on GOOG I have some medium/long term doubts on purchasing their stocks. Nice to discuss:
In the Bearish side: - Internet is obviously a self organizing system, and it's self organizing very fast and better lastly. Search Engines are great, Google infrastructure is amazing BUT people will search less and take more time with information received by feeds. So, what happen if less eye balls go to the Google ecosystem? Now even torrents can be downloaded from a feed (yes, I think on things like Boxee too)
- More about self organizing systems: What about a better, more efficient Keyword Exchange Market? including OpenX et al? Can adwords win in the end?
- GOOG is being really closed on the web side (remember they don't distribute API keys for the search engine anymore), and the web is towards openness at new levels (and with few business models).
- GOOG doesn't understand what MSFT does well: "building tools" (and converting developers in partners). How much time does it take to develop a simple application using Visual Studio? Is Google building TOOLS to develop solutions around their services? or you need to "just" know XML/JS/HTML/CSS? Remember Visual Basic!
- Things like Google Spreadsheets or Google Documents are toys, comparing it to Excel or Word. I think a Silverlight implementation of office tools will be a lot better than HTML/AJAX (hacks) implementations. HTML is currently pretty limited for a long term truce.
In the Bullish side: - Lot of opportunities on voice, audio, video recognition and retrieval. And Google has a strong reseach division (not like MSFT...)
- Lot of oportunities on cross language search and communication. Now that China has surpassed US, little communication is happening between these two worlds. In some areas there are more valuable information in chinese or russian than in english.
All Comments
Still long on GOOG (cost: 300).
Don't and won't own AAPL at this point. Trading based on emotion may be a bad thing, but the way they have handled Jobs' health issues makes me weary. I understand their overall opaqueness, especially regarding product, but this is a significant corporate issue, and I can't be confident in a company that seemingly isn't being straight with its shareholders.
it¹s going to test the Nov lows at some point this winter/spring.
I know about as much about investing as the next guy (meaning: NOT MUCH!), but always found myself attracted to investing strategies that moved away from quarter-by-quarter mood swings on stocks. I can't help but feel that judging success and failure in this time frame has an overwhelmingly negative affect on many aspects of business.
But this is not my money - this is not my research - and this is not my life. Thank you so much for sharing your enthusiasm and thoughts on these companies/stocks over the past year. Many people keep their investments private, so its nice to hear your thoughts on them.
Have a nice day.
-Dan
As has been said, thank you for sharing.
Anyway thanks for your blog and thanks for sharing your thoughts on stocks.
For goog...Huh? That sure is an abrupt change from your position early this year which was grounded in some solid analysis. Obviously I don’t know the full context of your discussion with these investors, but it sounds like your rationale in selling is driven by trying to market time. To be frank you are not really good at this as if you were you would of added more at $250 and exited now (Yes this is meant as a humorous point).
some of the best commodity buying opportunities for buy and holders IMO are happening now, though. and of course, let us not forget the golden rule: he who has the gold, makes the rules!
FWIW, I'm not planning to buy stocks until we start to see economic recovery, there doesn't seem to be much of a point until then, might as well make 2% on a CD or Treasury.
So suddenly you are now a market timer, because you had dinner with a bunch of market timers? If you had gone out to dinner last night with a bunch of VC's who specialized in biotech, would you come into the office today and start looking at bio deals??
Changing your investment strategy mid-game just sounds so wrong in so many ways. Don't get me wrong I believe that the era of "long term investing" is dead, but com'on, you make 1-2 points in a month and will now tell the market it will correct? Seams a little TOO much of an extreme. If you need to throw the market gods a bone, perhaps sell half your positions here...
"We both see a very tradable rally going into spring. Then, when we get even more earnings disappointments at the end of the first quarter and warnings at the end of the second quarter, we could see another test of the November 20 lows. Earnings disappointments are the catalyst for protracted bear markets. But the wild card is the coming economic stimulus package. We have never been in a situation like this."
Sounds like boring investment grade corporate bonds are the play of 2009. Happy hunting.
This is why I typically ignore your stock comments. You provide no rational reasons beyond emotion on why you invest in a stock. Saying that since Jobs return - Apple has ALWAYS been secretive - Jobs even more so. You've just figured this out now? In addition - you don't like several of their business models (just recently on twitter - you bitched about how iTunes lost you day one - whatever that means). So you seemed to have bought and sold the stock on a purely emotional basis. The wrong reasons to invest in anything.
(don't presently own the stock but I will say this - Apple continues to do something that other companies have not been able to do - deliver product in a consistent and reliable basis - something that will continue with or without Jobs)
say the word boss and i'll drop a video comment puttin' the haters in their place.
-- kid mercury, official AVC bouncer
tim is right that investing based on emotion is a bad idea
You are right to get out as you were wrong to get in in the first place...If I may, allow me few points from snowy France:
- I am surprise you exit before the president elect you support has a chance to prove anything
- bottom fishing is a good strategy for eskimos, not investors
- as a techno pro, your job, income & assets are linked to the technology stocks. Volatility and correlation move in tandem. Why do you want to add any corrolated risk to your holdings? Run for diversification with uncorrolated assets such as wine or else. See my post on this matter: http://camblain.over-blog.com/article-26505668....
please re-read the theory of the efficient frontier by H Markowitz, (http://www.riskglossary.com/link/efficient_fron...)
Have you read iWoz? If you can do that and still believe the things Jobs says, your just not paying attention.
Disclosure: I've been extremely bearish on online advertising for the past year and expect that unlike Sinatra....the worst is yet to come.
I just proof read my comment and found my tone a bit rude, sorry about that. I just wanted to advise you to take less risk.
Take care
I appreciate the comments and the advice I am getting from everyone this
morning
Don't cut your nose to spite your face.
Happy 2009,
John Mills-Pierre
I wouldn't want to be an owner of $AAPL without Jobs at the helm.
I say this as someone who has been recently won over. For a number of years I've been a Digital Media technologist and one of my projects was one of the early Video Download/Streaming services This was all way before iTunes moved into Video. However, the Services that I was involved were gradually shut down as once Apple got into that game (along with Amazon), it was game-over for small-time players. So I've always had a bone-to-pick with Apple, since they are the 800lb. gorilla in the industries that I work in. But I've learned to tip my cap to them since then.
I hope they do release an iTouch as I'm working on some mobile enterprise apps that would be a perfect match for a slightly larger format than the iPhone.
With regards to the stock price and my instincts in terms of where it's going to go - honestly I don't know and I don't have a stake in it. As long as Apple focuses on executing its vision and less on stock market volatility, they are going to do just fine. I also think that the Blueprints for mid-term product roadmaps have already been set and I don't think Jobs is quite the can't-live-without person as much as he was to get them over the hump.
$AAPL's cash horde gives it breathing room to weather the downturn, but does little to placeate market watchers, traders and institutional investor who think they are missing the boat on important verticals amidst high competition...i.e., the MacWorld 'big idea/announcement' being a US$2799 laptop when the market is shifting to lighter.cheaper.mobile computing that is redefining the space (netbooks to do 50M+ in 09 as one example), as well as no new mobi.iPhone products to stave off the rush of viable products that do more and are easier to use for the business/power/tweening users who need a physical qwerty keyboard because the mobi's are becoming the netbooks of tomorrow...anyone using a HTC TOUCHpro, or the reportedly.rumored forthcoming HTC built Palm device will tell you that although iTunes lock-ins are cool, times they are a changing (nevermind touchscreen products from LG, Samsung, and BBerry)...when the lost Rubenstein to Palm, most ballyhooed that they lost an innovator, while I looked at the rise of a competitor...after MacWorld I sold recent positive positions in $AAPL...
as to $GOOG, any day you can make money off of a stock that has free fallen from stratospheric internet bubble day euphoria pricing, is simply a good day...name one other stock that has bulls lowding the buy on a company that has dropped from US$659.96 to US$247.30 in 52 weeks wiping out massive market cap and investors funds while continuing to display no cohesive strategy on how they will monetize their portfolio of overpriced buys...gravity for some odd reason appears to be suspended for the moment...I also sold short term positions for positive results.
as to $AMZN, they continue to innovate and better yet partner with everything from bit players to sizeable market movers...from the pundits pointing to $AMZN being the reason that iTunes now has variable pricing, as well as its recent VOD (Video On Demand) product.partnerships, to 'best buys' availed for the masses buying product in its multiple verticasl, $AMZN was a strong recommend at its mid November price of US$34 which is where I got in...though in these rolling market, I'll stay the course till sunsets of US$70-75.
thanks again for your discuss...
An insight into where Amazon's sales is coming from would be interesting. I'm just curious as to how much is coming from outside the US. I for one (and like many in Bahrain/Dubai), buy things regularly from Amazon, have them Aramexed (www.Aramex.com - the Middle East Equivalent of Fedex) to me. The cost of buying online, shipping is still cheaper than buying stuff from the stores here!
Google no doubt has made its impact on our lifes, with cloud computing, Gmail has become a digital nervous system - and even if Google were to charge or some free/premium model, I'd guess that many would be willing to pay for it! Google knows how to prototype, kill the weaklings and run with the winners.
Apple. I'm a Mac fan, so my answer would be biased!!! Good health to Steve!
on losing trust and I think that¹s a binary thing. When its¹ gone, I should
be too. The decision to sell google all at once is kind of odd and I
probably should have done it over time.
Personally my strategy is to set a trailing stoploss once a position is in the green and let it ride, but getting out simply because you're betting against the trend and the chart is perfectly rational.
I'm still short GOOG from $399 as a hedge against collapsing internet ad revenue, which I am sure you can observe by polling your portfolio of web companies. It's a lot like 2000 out there right now and I think GOOG is going to get a huge surprise in its next Q earnings.
Now you *could* join The Dark Side and get short MUAHAHAH... just use a dang stoploss.
The thing about web ad revenues, as I recall painfully from '00, is they are chained together by arb - i.e. many sites which get adsense revenue get their traffic by buying adwords (or what have you)... so when $ starts to dry up for those sites, the entire pyramid comes down far and fast.
Another anecdotal observation: seems like lots of adsense ads I've seen in the past month are 'filler' ie promoting youtube or other google properties. They only run remnants like that if they have no other $ inventory. Interested whether others have noticed this also.
But hey, shorting isn't evil - it's hedging if you depend on things like adsense. Heck even farmers do it..
I also firmly agree with your position on $aapl and $goog for exactly the reasons you mention.
Also $aapl has introduced big notebooks at a time when the market is demanding netbooks. They may have made their first product strategy error in years with this. Netbook popularity may not ultimately be good for $aapl
I also think you've nailed in on $AMZN They are one company positioned very well for the developing internet.
There's a guy with a pretty good post about how poker taught him everything about business, and sometimes I think maybe I could write an even better book about the analogies between poker and investing (and a few important differences). A poker amateur runs into a poker pro (maybe Harrington said this) and invariably there's some hand that gutted him that he's been agonizing about for weeks or maybe years. "One time I had ace, ten. I flopped two pair and made a big bet. Then the other guy came over the top and I called. Then" yada yada yada until he gets gutted. "Did I play it right?" And the poker pro asks, where were you seated and where was your opponent? How many callers pre-flop? What were the stack sizes? And so forth, and the amateur, says hey, I don't know, just tell me what you would have done already!
That's why I'm not a huge fan of stock chat - without knowing an incredible amount of stuff about where the participant is coming from, what his strategy is, risk tolerance etc., what expertise they have, what work they did, it's really hard to determine if anyone knows what they're talking about. And you will lose your shirt if you listen to people, or think you're one step ahead of them, and you trade against the market that is two steps ahead of you.
Now one of the interesting analogies with poker - a big part of the game is to get in situations where you stand to lose a limited amount if you're wrong, and a much larger or unlimited amount if you're right. When you're adding on the way down, and cutting the position quickly on the way up, that's potentially putting you in the position of cutting your winners and letting your losses run, and having optionality work against you. Also, when your edge is deep industry knowledge that will win out in the long run, when you try to time the market you risk that positive earnings surprise and a big pop, and then wondering if you chase it or risk missing out.
On the other hand, when you put yourself in a position where you can add to a position on the way up, but put in a stop so you can only lose a little or even not lose at all on the way down, that's a good place to be. So that's the way I am inclined to play GOOG for now.
I¹m a total amateur in the stock market and have said so on many occasions.
That¹s why the vast (like 99%) of the money that we have at risk in the
markets is managed by pros.
The stuff I do myself and blog about (and run through covestor) is largely
about being able to put my money where my mouth is
I felt that the market had overdone it on google, amazon, and apple in late
oct and early nov and so I put some money down to prove it
Now I feel a bit differently and that¹s why I sold the stock and posted
about it
you have an edge based on deep understanding of the industry that tells
you when stuff is undervalued ... but short-term mean reversion trades
might not take maximum advantage.
GOOG - pretty great company in a pretty great industry
AMZN - great company in some not-that-great industries
AAPL - great company but hard to value - Jobs succession, iPhone
accounting and whether growth is sustainable or hit-driven
then again that other post I just wrote makes me think none of that
matters and I should sell everything LOL.
still have ntdoy
Might sell it today
I have do disagree with you on $AAPL.
Okay, yes, Steve is sick. So what? He built an incredible execution machine that is doing amazing things. True, its not cool for Apple PR not to be straight. But this is typical Jobs. He is neurotic, egocentric and very private guy. He just doesn't want people to know.
But just like its not cool for him to hide things, its not cool to sell stock because CEO is sick. It does not feel like a value investment, feels like a gamble instead. Apple's execution for the last decade is unprecedented in the industry, IMO and its not just Jobs that did it. He is important, but I am sure that Apple folks know what they are doing.
Of course I am being critical (hypocritical?) without much base - I do not own the stock, but wanted to give you my 2cents on this.
Don't give up on $AAPL, they need the support of people like you now more than ever. I mean this whole heatedly, because Apple's take over laptop/desktop market is in progress.
Good pick on AMZN though!
My AAPL buy signal is the day after "news" that Jobs is gone, provided that the stock is painting 60s the day after the news comes out. That's not priced in yet, and I don't think it changes anything substantial about the company.
I am hoping that google¹s management shows it¹s maturity and does the right
thing this year
Microsoft and the Media are focused on the wrong target. At $31, Yahoo is being valued at $45 BN. Assuming a 40% acquisition premium, Amazon also costs $45 BN.
Amazon Web Services (AWS) launched in 2002, and has revolutionized the entire Internet infrastructure model. AWS disrupts storage, hardware, hosting and content delivery markets, and is increasingly the most strategic service for thousands of Internet services. The AWS team is outstanding. Rackspace, Joyent and Media Temple provide small-time competition, and Google only released App Engine in 2008, giving Amazon the undisputed leadership position in utility computing.
Amazon has spent the past several years developing emerging leaders in digital downloads. MP3 is more open and flexible than iTunes, the Unbox + TiVo integration represents an important implementation in the Set-Top / TV services market, and the Kindle appears to be exceeding Amazon’s internal projections. Digital technology continues to impel fundamental change in media distribution, and Amazon is well positioned.
In retail, Amazon has the most comprehensive user-generated review database and Prime ($79 = free 2-day / $4 next-day shipping), the cost-effective answer to many Internet shipping problems; the alternative is a Big Box experience and $4 gas. Ultra-competitive prices and the most diversified inventory (1st + 3rd-party) make Amazon the online Wal-Mart. Why use a comparison shopping engine when Amazon offers everything at great prices, in one location, with convenient service?
http://jonathanmarcus.tumblr.com/post/33841675/...
I got out because of distrust of the company and that isn¹t solved by time
or events
In the Bearish side:
- Internet is obviously a self organizing system, and it's self organizing very fast and better lastly. Search Engines are great, Google infrastructure is amazing BUT people will search less and take more time with information received by feeds. So, what happen if less eye balls go to the Google ecosystem? Now even torrents can be downloaded from a feed (yes, I think on things like Boxee too)
- More about self organizing systems: What about a better, more efficient Keyword Exchange Market? including OpenX et al? Can adwords win in the end?
- GOOG is being really closed on the web side (remember they don't distribute API keys for the search engine anymore), and the web is towards openness at new levels (and with few business models).
- GOOG doesn't understand what MSFT does well: "building tools" (and converting developers in partners). How much time does it take to develop a simple application using Visual Studio? Is Google building TOOLS to develop solutions around their services? or you need to "just" know XML/JS/HTML/CSS? Remember Visual Basic!
- Things like Google Spreadsheets or Google Documents are toys, comparing it to Excel or Word. I think a Silverlight implementation of office tools will be a lot better than HTML/AJAX (hacks) implementations. HTML is currently pretty limited for a long term truce.
In the Bullish side:
- Lot of opportunities on voice, audio, video recognition and retrieval. And Google has a strong reseach division (not like MSFT...)
- Lot of oportunities on cross language search and communication. Now that China has surpassed US, little communication is happening between these two worlds. In some areas there are more valuable information in chinese or russian than in english.
Nice topic!