fyi... goog

Just an FYI on GOOG.

I still believe in my earlier posted thesis on Google.  The thesis is basically predicated on two assumption:

1. The market stays relatively healthy.

2. Google produces decent earnings.

The SP500 has declined 4% from its high. At the moment we are in a normal pull back. Can Europe blow up tomorrow, for any of the many logical/illogical reasons? Sure. Its just as likely that Oliva Wilde knocks on my front door asking if she could borrow some milk for her coffee, while she is in a tight tank-top and min-shorts.  Its unlikely, but yeah, it could happen!

I just think earnings will, for the most part, hold firm, and the market should maintain a historically lower multiple of 14-15. (Which the SP500 is currently in the low 14s.)

Specifically related to Google, the main concern last quarter was the cost-per-click (CPC). This took a hit in the fourth quarter because Google got even more efficient at delivering ads and the transition from PC-to-mobile that is currently taking place.

If Google sees a moderating CPC, the stock should be okay. If it produces a relatively weak CPC the stock could fall to the low-end range I provide in the linked post above. If Google sees a higher CPC, then I think investors have a reason to give Google a multiple expansion. An expanding CPC would suggest the transition (or new equilibrium between the two form of devices) from PC-to-mobile is taking place far quicker than most are projecting.