Apparently market is going over another bipolar symptoms initiated by NFLX, which I think it's hyper reactions, but with Bears looking to maximize its profits, NFLX is only the pawn to take advantage of the current macro economics.
So I am looking to enter GOOG and GOOGL, but what's the bear case on it?
I dont really see meaningful bear case even if rate hits all the way upto 20% (if we go that high!). It has great cash flow, EPS is positive, everyone is using google to answer their questions, cloud service is still successful, with Forward PE around 19, which is also historically low. It has relatively less risk to supply chain issues as well.
GOOG's PE is almost identical to healthcare companies like UNH/ANTM that forward PE 23/17, so in terms of valuation wise, it's really great.
And just for my psyche comfort, CEO's astrology suggests that his prime time isn't over yet, so I think he wont make huge mistakes in short terms, it's not like NFLX and NVDA CEO whose prime time are already over and whatever they decide, the decision will end up not great return (and TSLA's Elon Musk is just starting his prime time, so not too surprised even when it goes to 5000$ per shares within 5-10 years).
Anyway, sure less digital footprint means less traffic to google, but everyone has been using google anyway, and I am highly doubtful that folks will go back to use paper map to find out highway exit ramps or remembers brick-and-mortal stores' phone numbers.
The biggest bear case for GOOGLE is when index goes down, GOOG will go down, but shouldnt this be another great opportunity if you are looking for long terms? This side of bear often suggests that big tech like MSFT/GOOG has never experienced interest rate greater than 5% in its lifespan, so it will create high uncertainty.
2nd best bear case is GOOGLE is winding down services in Russia after the war, so they might lose more active users and digital footprints, which accounts for NFLX's decline in large parts, but GOOGLE isnt making profits from digital footprint anyway, but more like ads and premium services in youtube, so this can lead to slowing growth.
My counter argument is google has pricing powers that they can charge more like AMZN's prime membership increase. I mean, folks will be hesistant to run away simply because they dont like Youtube premium services. It's free to go into Youtube premium membership, but I havent seen anyone getting out of it (at least yet) to watch all the ads in each Youtube.
Last bear case is more like general that since everyone talking about GOOGLE with high conviction, it can have confirmation bias that no one is aware except insiders in the case of black swan, but…. in this investing/trading world, there isn't 100% certainty like everything else in life (and that's why my B.S. astrology psche comes in for my comfort just in case, because no one expected Napoleon would be failing in Russia's mission and everyone had high conviction for his victory). If one has bear case simply because of it, perhaps, he/she simply needs to go to I bond or CD/Saving accounts.
I mean…. Remember that Pelosi's call option 2000C expiring this September that she bought last December when it was around 3000$ per shares. She spent 1 million for each and she bought 10 of them!) I looked and now its about 400K only, so her account been bleeding at least 6 million $ just from GOOGLE, let alone other stocks/options (I dont remember all, but she also had RBLX 95C expiring sometimes this year, which is standing at 35$ per shares….
Perhaps, if markets dont like her enough, GOOGLE might go down 1999.99 to eat up her premium by the expiration date only to find out it can go back to 3000 after mid term elections? It's possible scenario (because in COVID crash, google experienced 30% loss in share prices), so if it started from 3000 per shares, it can go down to 2000, although I am thinking next support line is around 2200.
Anyway, what would you guys see bear case for GOOGLE?
PS: just so you know this is not a financial advice or anything, but I am simply looking for some more voices to see if I am missing something in GOOGLE.
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