I stopped by Amr's cube on my way out the door tonight (which is easy, since we sit like 15 feet from each other) and said "you were right!" And followed it with "now everyone is waiting for you to respond..."
So he did.
Now its time to gloat :) Google earnings are out, their sequential gross revenue growth was 22%, which did not just miss the 30% that the bulls were predicting, but also barely met the lowest of the sequential growth estimates (which was around 23%).
While I didn't say much earlier about this, I was surprised by the number of folks who didn't take what he said seriously. Amr really knows his stuff. And now he's all famous on the internets as a result.
Posted by jzawodn at January 31, 2006 10:06 PM
oh please, the capitulation of GOOG speculators has been a gimme for some time, and the short interest on the stock has been rising steadily since october, which tells you amr by no means crystal-balled this.
since YHOO is just a tracking stock for GOOG these days, you shouldn't be crowing too much. GOOG YHOO <= 30...wait and see.
Screw that. I'll crow when I feel like it. :-)
GrumpY - ha - very easy to make the call after the fact. A decline was not a gimme at all as share price is the key indication of market sentiment, not short interest.
I'd say it was a totally excellent call by Amr. He researched, applied good math and logic *before the fact*, and hammered it.
If you have confidence in your equation then go ahead and simply buy puts on Google and you can make millions with thousands. If you don't have confidence in your prediction don't knock the guy who ... did.
>> If you have confidence in your equation then go ahead and simply buy puts on Google and you can make millions with thousands.
because high short interest also implies future purchases. a volatile stock like GOOG, with significant short interest...i would either take a long position or no position.
go back to 2003 and you can find shorts getting burned by the thousands in crappy stocks with crappy earnings simply because they did not understand the potential energy of short interest, and the price spikes the buybacks create, and typically short interest capitulates quickly...the fear of a margin call is too much of a nail biter for most.
the real gimme on GOOG will be to go long if the short interest spikes even more after this, which i suspect it will tomorrow as all of the desk jockeys invert their GOOG at $1000 fantasies into GOOG at $10 fantasies.
in any case, i did not say his call was not correct, what i said was it was not unique or prescient. a number of commentators on marketwatch and thestreet have been talking down GOOG since last autumn. whether their talk was based on numbers is irrlevant - GOOG is not a numbers stock, it is an emotion stock.
>GOOG is not a numbers stock, it is an emotion stock
We certainly agree there GY - I'm digesting your other comments and may have missed your earlier point - I thought you were saying YHOO and GOOG should be within 30 points of each other, implying that puts are in order (or going long on YHOO).
Actually, I think GOOG missing its targets is a good thing - the industry could do with a bit of a reality check. A lot of investors seem to have forgotten the bubble and still have a strange rose-tinted view that the Internet (and Google in particular) is somehow magical.
I'm quite sure that those of us that work in the industry would much rather see Google & Yahoo grow steadily and keep innovating than go through 2001 again...
Um, didn't your friend's argument only apply to pretax items? GOOG's miss can be attributely almost wholly to the tax issue. Your friend was right, but for the wrong reasons.
Your friend must know an awful lot about corporate taxes. Without the additional domestic tax liability, Google would have *exactly* hit estimates. More here, from the conference call transcript:
82% revenue growth. Definitely something to crow about...
As I read that statement by the CFO, they'd been fudging their reported tax burden all year (i.e. over-reporting after tax earnings), and it came back to bite them this quarter. Perhaps this was just sloppiness, or maybe they were counting on sufficiently strong growth that no one would notice the extra tax in Q4. Either way, Amr was right that they couldn't sustain the rate of growth they've been reporting up to this point.
Google definitely put on a face like they were totally ignorant about corporate taxes.
Are you frigging kidding me ? A huge corporation like Google didnt foresee extra taxes. Gimme a break, with all the minds from Google and Wall Street working on the numbers, they mess up on taxes. That was extremely sloppy on their part. Yan yan yan yan!!! Goddammit, lame excuse. Learnt my lesson, just another volatile stock and Wall Street/Google are contributing equally to the volatility. Google - trying to play God and Wall Street reacting to that - Pumping and Dumping.
I just put a post up on my site (http://www.mattorama.net/2006/02/blogging.html) about Amr's blog and a missing comment I made there. Amr is incredibly anti-Google and fails to mention on his blog that he works for Yahoo and isn't exactly un-biased. This gives me a bad taste in my mouth as a blogger and I posted to that effect but he hasn't allowed my comment to show up on the post, furthering the bad taste.
Besides my concern that CNN apparently can't get singular and plural consistent even in the same sentence ("A Yahoo programmers says") the assertion by CNN that Amr had inside information was interesting. Since knowing how a rival will perform affects Yahoo's own share price, perhaps CNN wa implying that Yahoo employees with knowledge of search shouldn't be trading Yahoo shares?
Google is so widely predicted that there will inevitably be many people available who have predicted any earnings result it produces. Congratulations to Amr on winning the press attention lottery this time.
High time for Amr to change his career path. He should become YAFA (Yet Another Financial Analyst).
Why is that all CFOs come up with lame excuses when they miss the street expectations?
> I thought you were saying YHOO and GOOG should be within 30 points of each other
no, my comment was that GOOG under 350 would imply YHOO under 30. but i used some "less than" symbols that the comment filter stripped out (with some of the text), making my last sentence gibberish...well syntactic gibberish. the semantic gibberish is all me.
James, Yahoo engineers (above a certain level) have trading window restrictions applied to them, so we aren't actually free to trade YHOO stock whenever we want.
Anonymous, thanks, makes sense.
Ditto what Joe Hunkins said - Amr called the shot BEFOREHAND in a well researched way.
Matt Grommes: Actually, it's quite easy/straightforward to see that Amr works for Yahoo. Click on "Amr's Homepage" (near the top-left of his blog) and scroll down and under "My Work" it says "Yahoo!, Senior Software Engineer, since June of 2000"
I found this back when I read his original prediction before the earning's announcement.
Amr says at the top of his personal blog: "I scribble about Work, Life, Technology, and other random interesting topics" and I'm sure his opinions are his, not his companies ... similar to Jeremy.
BTW, look at Jeremy's blog - who does he work for? That's only one step away also.
In both cases, I think their approaches are reasonable.
To Matt Grommes:
I forgot to check my comment moderation queue, I took a look and found a ton of comments, not just yours, I approved them (sorry about that).
For the record, I am anti-google and pro-yahoo (what ever that means), however that does not mean that I can not make an objective analysis, dont mix the two.
Amr and Jeremy work for YAHOO?!?
Hey, can I get a Yahoo T Shirt?
Thx for clarifications GrumpY, I'm restoring my faith in your commentary.
you really are self centered boob.
What value do you think anyone puts on Amr's ability to postulate?
Give me a break. You and all the other yahoo's are a bunch of google-envious-yahoos. nothing to be proud of.
boo hoo ya hoo.