Back Up The Truck

Not sure what Mr. Market sees that I’m not seeing. After hours, Alphabet is trading at roughly 19X this years’ earnings. After reporting 26% YOY CC revenue growth and 30% net income growth. With a net cash position of roughly $110B. Insane. This is one of those moments where I could actually be tempted to put my entire portfolio in it…though prudence keeps me from that.

I sure hope Berkshire is loading up. Buffett has bemoaned missing out on Google years ago. Well, Mr. Market is giving him another time at bat.

Am I missing something?

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Years ago when WEB was buying apple, people were saying Apple is running out of exciting new products, people will stop upgrading iPhones. The sentiments were quite bearish. When WEB bought Appl, people say he’s crazy.

Now everyone seems are still quite bullish about google’s prospect, and everyone will applaud if WEB does buy it.

on the same page

Then there’s Meta/Facebook, trading after hours at less than 15X. That’s the price for the absolutely average business during an absolutely average (going back roughly a century–which may have no modern relevance)valuation times. And that prototypically average business was certainly not carrying a sizable net cash position, nor run by its founder who has half a century of his life left to pour into the business.

What seems irrational is that FB is down 54%, due to the damage done to its business by Apple’s privacy changes. (Seems like an absurd overreaction). Well, if advertisers spend far less on Facebook ads due to these changes, where does Mr. Market think all those ad dollars will go? Seems to me that Google should reap the lion’s share of any migrating investment dollars. As I own healthy chunks of Google, Facebook, and Amazon, I think I’ll be happy regardless.

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Now everyone seems are still quite bullish about google’s prospect…

The share price doesn’t appear to support your claim.

Now everyone seems are still quite bullish about google’s prospect…

The share price doesn’t appear to support your claim.

Makes you wonder what’s behind the selling pressure? Computer algorhithms? Seems hard to believe that a cold, rational evaluation of the long-term businesses would justify Alphabet down 25% and Meta down 55%.

Am I missing something?

Patience.

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“After hours, Alphabet is trading at roughly 19X this years’ earnings. After reporting 26% YOY CC revenue growth and 30% net income growth. With a net cash position of roughly $110B. Insane.”

Agree and added to this long holding within the last month (top 3 holding). Great businesses, great mgt, great moat, GARP, 30+% ROE, shareholder friendly, now 70B approved for buybacks, in solid niches for the future, and the July stock split does not hurt. Been in my Never sell category since 2005 and kinda like the volatility here.

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Meta and Goog. Both an opportunity to deploy significant funds…

Swing you bum?

https://youtu.be/k5eMrXjCG0w

WEB talking about pitches and swinging.

Quite aside from the issue of how cheap Alphabet is or isn’t (trailing P/S 5.58 and trailing P/E 20.46 as I type),
I notice this in their reports:

"Cash equivalents and marketable securities are comprised of time deposits,
money market funds, highly liquid government bonds, corporate debt securities,
mortgage-backed and asset-backed securities, and marketable equity securities."

They have non-marketable securities too, but does anyone know offhand what their marketable equity holdings are?
I can’t seem to find a 13F, but I don’t know if they disclose equivalent information in a different way.

Jim

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Hi Jim,

As far as public equities go, I see:

  • 57.4 million shares of ADT
  • 47.2 million shares of EQRX
  • 21.6 million shares of OSCR Oscar Health)
  • 31.9 million shares of PL (Planet Labs)
  • 12.6 million shares of SZSE:300308 (Zhongji Innolight)
  • 4.5 million shares of IONQ
  • 6.3 million shares of BHIL (Benson Hill)
  • 1.4 million shares of TSE:4165 (Plaid)

Best,
Buck

TMFBuck

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Alphabet also owns shares of substantial public equities beyond the above (e.g., Lyft, Duolingo) via its various subsidiaries, such as CapitalG (https://capitalg.com/). I would guess that these securities fall under that same language, but I’m unaware of an exhaustive tracker of public information re: publicly traded equities.

TSLA’s P/E multiple is shrinking drastically every quarter. Not a Peter Lynch stalwart company yet (WEB seems to like stalwart companies).

But it is important to notice aggressive multiple compression as revenue and sales ramp along with two new massive factories.

It doesn’t matter what we suggest here on this board. WEB will do his own thing!

:^)