Roy Schestowitz <newsgroups@xxxxxxxxxxxxxxx> espoused:
> ____/ Mark Kent on Thursday 03 January 2008 18:41 : \____
>
>> nessuno@xxxxxxxxxxxxxxxxxxx <nessuno@xxxxxxxxxxxxxxxxxxx> espoused:
>>> On Jan 2, 4:56 pm, Roy Schestowitz <newsgro...@xxxxxxxxxxxxxxx> wrote:
>>>> ____/ ness...@xxxxxxxxxxxxxxxxxxx on Wednesday 02 January 2008 23:22 :
>>>> \____
>>>>
>>>> > Microsoft up 15%
>>>> > Google up 50%
>>>> > Apple up 133%
>>>>
>>>> > I think if you look over the last 5 years the comparison is even more
>>>> > dramatic.
>>>>
>>>> It means very little. Microsoft is pumping cash into the stock. In general,
>>>> stock price does not indicate much because it doesn't just gauge actual
>>>> wealth. IBM and Dell, IIRC, are in heavy buyback mode as well. Novell will
>>>> inevitably end up this way as well.
>>>
>>> Yes, I've read how many large corporations in the US are buying back
>>> stock. But to the extent that is true of Microsoft, it means that
>>> their 15% gain means less than it seems. I don't know if Apple has
>>> been buying back stock, but surely their 133% gain is related to the
>>> success of iPod, iPhone and OS/X.
>>
>> The actual share price is meaningless unless you multiply it by the
>> number of shares in order to get the actual market cap.
>>
>> As Microsoft have been buying back shares, they have been reducing their
>> market cap by the value of each of these shares which they bought back,
>> although that is ameliorated by the rise in value which went on at the
>> same time.
>
> Google isn't far now from Microsoft's market cap. It recently surpassed IBM's,
> IIRC, which isn't bad for a 9-year-old company, My worry is that Google
> absorbs some ex-Softies, many of whom are vain, unethical, and inherently
> anti-Google. They could poison Google from the inside and drop the "Do No
> Evil" mantra in the sink. Watch Google closely and ensure it doesn't become a
> bunch of geeks on a high throne. Apple is already suffering from that
> syndrome, especially with recent growth.
Google will inevitably change culture as it grows. Politics is surely
already rife, and the lead of the technology people will be eroded as
the politicians gradually rise to the top and stagnate the business. To
be honest, this is a good thing as it's the only way some businesses
could be stopped. Just look at Microsoft, had it not been for their
inept senior management, they could've destroyed the free software
movement long ago, or at least put it back a decade or two.
>
>> You then need to take into account the indices of the market for the
>> same period, and as far as possible look at how the overall market
>> moved. If they overall market moved up by, say, 10%, then Microsoft's
>> 15% is really a 5% increase above the market, which might be almost
>> entirely funded by share buy-back, thus reducing their market cap by the
>> value of those shares.
>>
>> Of course, analysts look at this stuff all the time, but as many of them
>> are non-technical, they often get things wrong, as they are as much
>> driven by mathematical analysis of reported financial performance plus
>> ongoing trading as they are by a deep understanding of the actual market
>> in which the company operates.
>
>
--
| Mark Kent -- mark at ellandroad dot demon dot co dot uk |
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