Editor's Note: TheStreet.com has always believed that offering a wide variety of opinions and viewpoints -- rather than a monolithic "house view" -- helps readers make better-informed investment decisions. In that spirit, we bring you the debut of "360 Degrees." This new weekly feature is designed to take advantage of our stable of reporters and contributors, who will offer analysis of specific stocks from all angles -- fundamental vs. technical and short-term trader vs. long-term investor. The first "360 Degrees" column examines Internet search giant Google ( GOOG). Future subjects will be chosen by the readers; please see our poll at the end of this column to help determine the next stock to get the "360 Degrees" treatment.
The Guru: Beat the Selloff Blues by Jim CramerThis column was originally published on RealMoney on Jan. 20. Every time we have a good market, as we have since the year began, you get these folks who believe that selloffs have been repealed or that a selloff is a vast insult to the people's intelligence, or those who believe a selloff is the end of the world. We've had a gazillion selloffs in my time and if one occurs after things have been terrific, I find that it is accompanied by a cacophony of people who decide that this business is too dangerous and who give up whatever they have made. I am not writing this to taunt. I am writing it to suggest that the way to beat these blues is simply to be sure that you are selling into strength, particularly when things are overbought and you get so much optimism. Remember, I am not talking about timing the market. That's not my plan. I am talking about going against the grain and letting even some of your favorite stocks go so that you have room to buy them back when they come down.
Take Google. I still believe Google can earn $10 and trade at 60 times earnings. But that's a destination, and there is no interstate highway in this business, just winding roads that don't get there as fast as we like and whining kids in the back seat who make us stop and get out, and irritate us. But if you had unloaded some Google when it was flying, just think of what you could do now. You could buy a little back -- not all of it, just a little. And then you could hope that the market goes down more. If it didn't, you'd be OK because you bought some here. If it did, you could buy even more. It doesn't work like that, though, if you never take profits, or if you believe that selling is going to leave you naked. Remember,
always worry about the downside . The upside will then take care of itself. Jim Cramer is a director and co-founder of TheStreet.com. He contributes daily market commentary for TheStreet.com's sites and serves as an adviser to the company's CEO. To see his personal portfolio and find out what trades Cramer will make before he makes them, sign up for ActionAlertsPLUS .
Fundamental Concerns: Google's Momentum Could Wane by Frank CurzioThis column was originally published on RealMoney on Jan. 19. There is no doubt that Google is the darling of Wall Street. The Jan. 18 downgrade by some small shop only serves as the exception to the increasingly popular analyst game of "top my price target." But what's being overlooked in this game is that the stock's further rise isn't dependent on Google's business. It's dependent on momentum. Since its IPO at $85 a share in 2004, Google shares have soared about 425% to $450 a share. I admit I was on the sidelines the whole time during the move, but enjoyed watching the action, as well as the analysts race their targets ever higher. But shares are not moving higher on valuation here; they are moving higher on momentum. Momentum consists of two important conditions:
- Positive sentiment
- Favorable market conditions
here to read the rest of Curzio's cautious take on Google. In keeping with TSC's editorial policy, RealMoney.com contributor Curzio doesn't own or short individual stocks. He also doesn't invest in hedge funds or other private investment partnerships.
Techno Bull: Click Fraud Just Another McGuffin By Cody WillardThis column was originally published on RealMoney on Jan. 24. So let's talk about this Google click fraud thing for one second, as it has become a large part of the bear case on Google right now. Look, Google knows there are some teens in Siberia, and yes, probably Duluth too, who are messing with click-through rates by repeatedly hitting ads. But the big question isn't whether or not this nefarious stuff is going on. It's whether or not this evil stuff (to borrow the Googlite phrase "do no evil") is going on to an extent that Google's customers will be surprised to find out about. It's related to how advertisers in television and magazines (and all other media) have to account for TVs that are left on for the dogs while nobody's home, or for subscribers who never open the magazine. And guess what -- both the sellers and the buyers of such advertisements are aware of and account for this ahead of time. You see, Google tells its customers beforehand that there will be click fraud, and it even accounts for that in its pitch. That's right, when Google tells a customer that they can expect X return on investment (ROI) when using Google's ad network, Google's already included click fraud in those numbers. So in essence, the only way for this supposed click-fraud issue to really become problematic is if it's worse than Google realizes. Consider it the online marketplace version of Wall Street's "worse than expected" scenario.
At this point, click fraud appears to be a tiny, tiny fraction of ad hits, probably less than a couple percent of all clicks. But even if the problem were to escalate to a higher fraction of all clicks, Google would simply factor that higher rate into its models and work with the customers to maintain a high ROI. Where the issue could become problematic would be if it becomes such a large fraction of clicks that the ad network ROI becomes unattractive to Google's customers. Is that the case right now? Before answering, I'd suggest a look at the remarkable growth that Google is enjoying. This company is one of the fastest growing companies in the history of the planet, and companies simply don't grow like this if they're selling a bad product. Google's customers are obviously generating high ROI from Google's ad network or they'd stop using it. The click-fraud issue exists, to be sure, but Google and its customers are plenty aware of it and already factor it in. Let's move on, shall we? Click
here to read the rest of RealMoney.com contributor Cody Willard's take on Google. At the time of publication, the firm in which Willard is a partner was long Google, although positions can change at any time and without notice. Cody Willard is a partner in a buy-side firm and a contributor to TheStreet.com's RealMoney. He also produces a premium product for TheStreet.com called The Telecom Connection and is the founder of Teleconomics.com.
If Google is going to remain in this uptrend, the selloff needs to be contained by the support line above. My note says "potential" trend line because it takes at least three distinct points to form a valid trend line. So far, there are only two. So if the bears take it below this line, my bet is that $300 is in play. The next catalyst for Google will be on Jan. 31, when Google announces earnings. "Sell on the rumor, buy on the news, anyone?" RealMoney.com contributor Dan Fitzpatrick is a freelance writer and trading consultant who trades for his own account. At time of publication, Fitzpatrick held no position in Google, though positions may change at any time. here to read senior writer Jonathan Berr's full story. In keeping with TSC's editorial policy, Berr doesn't own or short individual stocks. He also doesn't invest in hedge funds or other private investment partnerships.