You probably don’t want to read about Google and Facebook because these names are widely popular. There’s nothing new with them. You’d probably better hear about ShitPussy which is on the Venture. That’s a name you haven’t heard before and the EPS have increased from 0,00002 cents last quarter to 0,004 this quarter. Such an increase.
As promising as Shitpussy is, I’ll go to the other end of the specter and examine two giga caps because they both worth a close look. And I believe both are good investments.
Facebook
Market Cap : 520 billion dollars (incredible that a business founded in 2004 by a 20 years old guy is now this big)
Annual EPS growth last 5 years : 62%
Current ROE : 25
Forward PE / average PE last 5 years : 0,4
Debt level : 0,7 times earnings
Stock performance last 5 years : 835%
Google
Market Cap : 720 billion dollars
Annual EPS growth last 5 years : 13%
Current ROE : 14
Forward PE / average PE last 5 years : 0,95
Debt level : 1,5 times earnings
Stock performance last 5 years : 215%
Both companies are sitting on a mountain of cash, they almost don’t have debt (compared to what they earn), both companies are selling for less than their historical average PE ratio. The numbers of Facebook are better than Google. But in my view, Google is a solid monopoly while Facebook is not as solid for the very long term (everybody loads Google at the start of their computer while many people but not as much load Facebook). Both stocks are great. I’d buy them both over ShitPussy because they're solid and they generate more cash than a third world continent.
And even if they’re huge, I believe they will keep growing for many years, because they’re mainly advertisements businesses. And people now spend much more time on the Internet than in front of a TV.
And even if they’re huge, I believe they will keep growing for many years, because they’re mainly advertisements businesses. And people now spend much more time on the Internet than in front of a TV.
All of sudden, I feel very stupid for not owning Google and Facebook. I can pass on Amazon (even as the personal net worth of Amazon founder Jeff Bezos surpasses $100 Billion). The financial stats for Google and Facebook are truly impressive. Their economic moats are vast. You don't have to wait for SOME DAY for these companies to be profitable. They are profitable and they come with tens of billions of dollars in cash. We invest in so many companies that have a lot of competition. Then you come across Facebook and Google. They pretty much own the monopoly board. They make investing easy but human nature overlooks the easy and the obvious. We want to make it hard for ourselves. We like to gamble. It's a shame.
RépondreSupprimerYes, they’re both a bit pricey but they dominate and will continue to do.
SupprimerGoogle is one of my top 10. Don't have facebook for the same reason you mentioned Penetrator although I believe the growth on facebook is far greater than google's. I can't believe that google's monopoly is lasting this long and what's more amazing is no other companies have ever been able to challenging it. Probably never will.
RépondreSupprimer