A Different Kind of Wii

Not much to add to this one either.  Gotta love the start of the 3rd quarter, eh? ;)

Amazing Virtual Pee Experience from Japan

As any good geek should know by now Japan has some of the wackiest and most unusual products anywhere.PS.  Nintendo's stock, like Google's stock, is a buy right now too.

Google Time Travel

I think I'll just link to this one for now...

Introducing Gmail Custom Time^TM

Be on time. Every time.^*

Google's all about empowering that end user, eh?

PS.  I still say Google's a screaming buy below $500 these days.

Moto Mojo Gonna Lead to Momo, or, Buy MOT Below $10

Icahn's down pretty huge on this Motorola trade as far as I can tell, and he's gonna need it back to $15 or so to make any money on it, again as far as I can tell from having been following his activism in this name over the last few years.  But he's finally getting a large part of what he's been looking for, as Moto finally announces that it's going to be spinning off its handset division from the rest of the company.

The handset division, in case you haven't been around anybody in the developed world in the last few years, peaked at about the same time the Razr was featured on HBO's Entourage in 2004 or so...it's been all down hill from there as Motorola and its supposed and now-departed savior Ed Zander bet the next half-decade on the Razr form factor somehow convinced that tapping on a 12-button phone platform that'd been around since the punch phone replaced the dial phone a quarter-century ago was a good idea as convergence made smartphones king.  In other words, the Razr was great in 2004, but it sucks in 2008 but Moto's idiots were still hoping it'd catch back on.

The good news is that Moto's finally going in all kinds of new directions, and they're going to be rolling out some really great phones this year and next.  On top of that, the spin off will probably squeeze out some market value further.  And the rest of the company's undervalued so long as the economy stays steady as she still is.

Will talk about this more on Happy Hour tonight, but the upshot is that Moto's a darn good looking investment (and even several-month-long trade) here below $10, just about 10% above its recent lows and still 50% from its highs last year.

Endless Google Domination

I must have written hundreds of articles and blog posts for RealMoney.com, on these pages, for The Financial Times and elsewhere for the last few years about how Google's dominance will grow for a long time.

Take a look at the Tech page on NYTimes.com today.   It's really all about Google, isn't it?  Fastest growing company in the history of capitalism.  Still a screaming buy below $500 even if I'm not jumping up and own about it like I was when Whoopi was on Happy Hour and said she was bummed about owning it at $415...

GOOG: Who needs a multiple anyway?

As much bulling as I've been doing on Google down here below $500 again, I was actually worried that Barron's would call it a value stock or something this weekend. And, see, as Barron's has been dead wrong on Google since it first came public and they were quoting dudes saying Google was fair valued at $25 a share.

As I've pointed out before, that'd be like buying it at 1x this year's (less than four years after it came public) earnings...good value, no? LOL. In fact, here's a thought that'll blow your mind --

Google's already earned almost as much since it came public as its entire market cap was when it came public. In other words, those who bought it the day it came public and held it through most of last year, as I did, have already seen more than 60% return on their investment through earnings themselves. The mulitiple on top of those earnings is, in this very rare case of such huge growth like this, in some sense just gravy.

That's why whenever somebody calls Google expensive you should take it with a grain of salt (or maybe you should pour the salt in your ears so you can't even hear them say spew that nonsense that Google is expensive). At $450 a share, Google's trading at somewhere between 15-18x next year's probable earnings. Ex out the nearly $20 billion in net cash on the balance sheet (say about $60 a share) and we're looking at an enterprise value (how much the market values the company minus the net balance in the company's checking account) to earnings mulitple of the stock right now is 13-15x next year. For the fastest growing company in the history of capitalism.

The biggest risk to Google in 2008 isn't earnings growth problems, but rather political and regulatory. I can see these guys getting in the cross hairs of the politicians, bureaucrats and other regulators who love to attack even natural market share dominance such as Google's established through its choice to become the only well-capitalized, mainstream site on the planet that is content source agnostic.

Luckily for us Google bulls then, we can rest assured that Barron's is sticking with their bear story on Google. Even quoting no less an authority on the name your favorite tech permabear and mind, Fred Hickey:

Google's Next Stop: Below 350?
Word Count: 1,026 | Companies Featured in This Article: Google, Microsoft, Yahoo!, Amazon.com, Coca-Cola
Review | Preview

Coca-Cola Looks Ready to Pause

GOOGLE LIKES TO DESCRIBE ITSELF AS A TECHNOLOGY COMPANY. But it is an advertising company focused on consumers, and in today's troubled economy that's a problem. Google (ticker: GOOG) makes money when an Internet user clicks on an advertisement shown on the company's Website or a site run by a member of Google's network. Revenues are vulnerable to reductions in both clicks and corporate ad budgets, which seem likely this year.

Google's shares, down 41% from their November high of 747 to a recent 433, reflect some of this concern, as well ...

And with that, I think I'll stop bulling Google for a little bit. I could be dead wrong, you know.

Not A Long Bull, But Bullish on Google

I sit here looking at Google at $450 and I'm licking my chops picturing buying some common and calls in this thing right now.

I feel the desire for that sense of rush that comes from putting on a trade like I picture right now. I'd probably be pretty aggressive at these levels.

All that said, as I keep thinking to myself since I started this new TV job and stopped running money -- It's easier to be bullish than long.

I pounded the table about selling Google on Happy Hour and here on CodyWillard.com and had indeed sold the last of any exposure we had to Google back before I started the show. So in my head, I feel confident about my Google analysis.

Of course, I have to wonder though how much of any confidence comes from selective memory. I'd started warming back up to Google in recent weeks -- at much higher levels. And I've been saying that I'd just be buying in tranches so I could buy more if Google came down more. It has.

And now I'm as "bullish" as I can be about Google. But I wonder how sick I'd be to my stomach right now from the tranche buying I'd have been doing were I actually running money. And would I have already put too much capital to work? Ain't no selective memory on your P&L.

It really is so much easier to be bullish than long.

PS. I recommended Google in the new The Cody Report that we've finally brought back after a long-hiatus.

Update:  I give more analysis and details of what options on this trade in this post here.

CW on RM: The Cost of Reliable Media

The Cost of Reliable Media
05/16/2007 12:52 PM

Here's a great example of why brand names that have credibility, such as The Wall Street Journal, are as valuable as ever. engadget just cost who knows how many investors how much money by reporting that "iPhone delayed until October, Leopard delayed again until January."

Apple  immediately tanked on volume. Soon thereafter, while the stock was still in free fall, engadget updated its big supposed scoop:

Here's the story. Our source supplied us with an internal Apple email that went out to thousands of employees (published after the break); as it turns out, the internal memo Apple employees received was actually redacted shortly thereafter. (Also published after the break.) We also just heard back from Apple PR -- they let us know that the iPhone and Leopard are both still on track, and should meet their expected launch timeframes. We'll keep you up to the second with any further developments.

Oops, seems Apple says that "internal Apple email" was a fake.

A young(er) hedge fund manager who is going through a big drawdown asked me despondently the other day if I had any advice for him. I told him that we always get in trouble when we start chasing short-term gains. Trading, like good journalism, is a marathon, after all.

engadget, in the pursuit of breaking a potentially big story, just stepped a couple rungs down the credibility ladder and cost a lot of people a lot of money. Not cool at all.

That Murdoch -- he sure does have a long-term vision of his own, huh? And he gets the value of brand in this new Internet world of ours.

At the time of publication, the firm in which Willard is a partner was net long Apple and News Corp., although positions can change at any time and without notice.

CW in RM: eBay Phones in a Winner

eBay Phones in a Winner
05/14/2007 11:20 AM

Wal-Mart and eBay announce that the big retailer will offer Skype phone gear and calling plans at more than 1,800 stores. You've seen me write extensively about the importance of finding de facto standards in technology. And you've also seen me call Skype a de facto standard in VoIP services. In January, the Skype results stood out for me in the eBay call, in large part because Skype's dominance in VoIP was clearly growing.

eBay took a huge risk and got slammed at the time of the deal in 2005 for overpaying (more than $4 billion) for Skype. That bet will pay off only if Skype becomes a global de facto standard for calling over the Internet.

This deal with Wal-Mart seals the deal for Skype as the standard in VoIP services. And there's going to be good upside in the fundamentals for eBay stemming from the Skype business over the next few years. eBay's a buy.

At the time of publication, the firm in which Willard is a partner had no positions in any of the stocks mentioned in this post, although positions can change at any time and without notice.

CW on RM: Weekend Munchies

Weekend Munchies
04/20/2007 3:54 PM

"Everything is exactly what it seems.
She's not hiding wings beneath her leather jacket.
Making my way downtown through the haze,
Making my way downtown through the maze,
I thought I'd figure out how to change.
But you never change.
You're not straying far from who you were in high school.
Everyone is exactly who they are." -- Slow Runner

Bull-market rally, good earnings: That about sums up the action of the week, eh? Here's what I'll be pondering this weekend.

• Citi has been hamstrung by the government and regulators, much like Microsoft was from the late 1990s until Google shocked the world with its rise to dominance "despite" Microsoft's monopoly.
  
  Rumors of a Citi takeover of Deutsche Bank sure would indicate that those chains are coming off. CEO Chuck Prince et al would finally be able to leverage the growth potential of this giant asset base.

• It's exactly because of the continued hamstringing that has been done to Microsoft that Softee cited Google's acquisition of DoubleClick as antitrust. Microsoft sure scored some serious political bricks for its own foundation with this one.
  
  Note that Google needed pretty much no subsidization or other help from the government in its rise to dominance over Softee, say, unlike the ethanol companies messing up our food and food-supply pricing, as I discussed on CNBC last summer.
  
  Sun, RealNetworks and the other losers who could never figure out how to compete against the formerly dominant Softee sure look like chumps and cost us a lot of innovation and progress with their endless litigation and calls for regulation. I went off on this topic on CNBC last summer here.
  
  The upshot? Stick with the Googster.

• You know that corporation formerly known as the Rolling Stones? (That's what I call that enterprise anyway.) You heard about that U2 group formerly known as a rock band?
  
  This endless corporatification of music is certainly part of the problem that's causing the recently reported 32% year-over-year drop in music sales.

• Remember when the telco hardware providers like Lucent and Nortel got desperate near the end of their bubble and started doing ridiculously risky vendor-financing deals with their customers to keep the growth balls up in the air? Remember when the car companies did that with zero-percent financing and were able to extend their previous boom cycle?
  
  You see the parallel between those and where we are in the real estate cycle, with the no-doc loans that had been keeping the real estate growth balls up in the air?
  
  You remember how the telco and car cycles ended for investors? Just askin'.

• With these strange Tribune-like deals in which employees are quasi-funding buyouts of entire companies, I wonder what kind of deals could be cut in Detroit if the private-equity people really got creative.

• On that note, as my colleague Ashwin points out, wouldn't it be smarter for union members to allocate their union dues for purchasing stock in their employers as opposed to contributing to a political bureaucracy? GM union membership dues were $191 million in just 2006 alone. That is 5.5 million shares at $35, or about 1.1% of the company. Not a small amount. Can you imagine if the workers had been buying their own employers' stock for the past three decades with their dues? Just sayin'.

I feel this city, these stocks, this job -- er, these jobs -- my nonwork life, these networked tech gadgets and just about everything weighing down on me. I need some fresh air, a little change, maybe a trip home to Ruidoso. Thanks for reading, and I'll see you next week.

At the time of publication, the firm in which Willard is a partner was net long Microsoft and Google, although positions can change at any time and without notice.

CW on RM: Taking Snapshots of Big Tech

Taking Snapshots of Big Tech
04/18/2007 8:38 AM

I just wish there were some earnings reports so I have something to do these days. Oh, wait, it looks like a few reports came in last night. Here's my snapshot take on some of the big ones:

• Intel: The report wasn't half-bad, as my Pops used to say around the animal clinic when I'd finish cleaning out the horse pen in the back. The main focus of the sell-siders this morning seems to be on the expansion of gross margins back into the 50% range. With AMD's scorched-earth pricing policies, there was a lot of concern that gross margins would come in somewhere in the mid-40% area. That has the stock up pre-market, but it's a long day ahead. We'll have to see if the upward bias to decent earnings reports continues.

• IBM: The company didn't exactly affirm a strong tech-spending cycle in the enterprise. While that's worrisome from a macro perspective, as we try to gauge the state of enterprise demand, it's especially bad for IBM. It means that some of its strategies, such as selling off its PC biz to Lenovo, might not be panning out as well as it hoped. There are lots of downgrades and disappointed analysts in this one today.

• Seagate: Given the recent top-line warning, the fact that Seagate remained profitable and kept profitable guidance out there for the next quarter and the year is a good thing. That said, as my recent video and written mea culpas already stated, I was already wrong on this name. My out-of-the-money calls still have some value because they're so far out in time, and I'm not looking to sell them. I've not added to them since the warning and probably won't now, either. Moving on.

• Yahoo!: What a shocker that this company couldn't deliver on its always ratcheted-down guidance yet again. How many, how many, how many quarters in a row has this management mismanaged the Street? More to the point, these guys are destroying their brand with their compromised and confusing policies of content delivery, as I outlined when I suggested the paired trade with Yahoo! and Google. As you can imagine, I'm upset that I was too "disciplined" to put that trade on before the earnings call, but discipline does trump conviction, as Jim Cramer will tell you.

More in a bit.

At the time of publication, the firm in which Willard is a partner was net long Seagate and Google, although positions can change at any time and without notice.