This year Google introduced its first-ever dividend (I have a position in GOOG) which is interesting. One the one hand, to Sherry's point, some investors consider this a signal and transition from growth to value. When they announced the dividend earlier this year, I noticed some SA writers refer to classical theory that new dividends suggest a company has fewer re-investment possibilities and must be maturing, especially in combination with share buybacks (I myself don't necessarily agree with this in GOOG's case but it's a not uncommon view). On the other hand, the mere introduction of any dividend creates new demand because many funds/ETF require some dividends; I view this as increasing the quality of the stock (I'd love to know how many funds add GOOG this year due to its new dividend, and what sort of dividend "bid" support is thusly created).
Against the 10*10 criteria, I'd have to agree on trimming almost entirely based on size alone: Google is a $2.0 trillion market cap company with >$70 BB in revenues, with all the attached regulatory scrutiny. It's not my idea of a 10-bagger today, but it's low-risk and high quality.
I totally agree with your take here, David. I think if someone is looking for a lower risk, dividend-bearing stock, then I think that Google is still not a bad option. I don't believe it's going to go to zero anytime soon, it's still got solid top 3 performance in some business categories. But for me to want to take on the risk of investing in individual stocks, I like to go with the 10x10 criteria, which I don't really think Google fits right now.
Over a 5 year period, Google stock returned 166% returns compared to SPY at 93%. I feel your analysis is misleading and knowing that people respect your opinion, you might want to add the right caveats so people can make a better informed decision.
Hi Kahani, thanks for sharing your thoughts! You're right that Google has - over a 5 year period - outperformed the broader market and I have actually stood to benefit from that myself as a holding RSUs from my time as an employee there.
However, my analysis is actually more forward-looking. Perhaps the chart I am showing here depicts only part of the picture, but most of the focus on the article is about how I think Google is standing on each of its bets to carry forth its growth in the future.
This year Google introduced its first-ever dividend (I have a position in GOOG) which is interesting. One the one hand, to Sherry's point, some investors consider this a signal and transition from growth to value. When they announced the dividend earlier this year, I noticed some SA writers refer to classical theory that new dividends suggest a company has fewer re-investment possibilities and must be maturing, especially in combination with share buybacks (I myself don't necessarily agree with this in GOOG's case but it's a not uncommon view). On the other hand, the mere introduction of any dividend creates new demand because many funds/ETF require some dividends; I view this as increasing the quality of the stock (I'd love to know how many funds add GOOG this year due to its new dividend, and what sort of dividend "bid" support is thusly created).
Against the 10*10 criteria, I'd have to agree on trimming almost entirely based on size alone: Google is a $2.0 trillion market cap company with >$70 BB in revenues, with all the attached regulatory scrutiny. It's not my idea of a 10-bagger today, but it's low-risk and high quality.
I totally agree with your take here, David. I think if someone is looking for a lower risk, dividend-bearing stock, then I think that Google is still not a bad option. I don't believe it's going to go to zero anytime soon, it's still got solid top 3 performance in some business categories. But for me to want to take on the risk of investing in individual stocks, I like to go with the 10x10 criteria, which I don't really think Google fits right now.
Over a 5 year period, Google stock returned 166% returns compared to SPY at 93%. I feel your analysis is misleading and knowing that people respect your opinion, you might want to add the right caveats so people can make a better informed decision.
Hi Kahani, thanks for sharing your thoughts! You're right that Google has - over a 5 year period - outperformed the broader market and I have actually stood to benefit from that myself as a holding RSUs from my time as an employee there.
However, my analysis is actually more forward-looking. Perhaps the chart I am showing here depicts only part of the picture, but most of the focus on the article is about how I think Google is standing on each of its bets to carry forth its growth in the future.