Filed under: Major movement, Other issues, Rants and raves, Google (GOOG), Market matters, Top Picks 2007

What do you do when a stock that you own is falling on no news? That is the case for Google Inc. (NASDAQ: GOOG) shares which closed down today $31.90 bottoming out at $632.07. This is down from it’s recent high of $747.24, losing $115.17 or about 20%.

When it was going up there was plenty of good news and hoopla to embellish stories of it reaching $2000, but on the way down there has actually been good news too. I could rationalize all kinds of intriguing stories as to why this has occurred but the most obvious is that it got too expensive and traders started thinking it was time to take some profits.

There are also plenty of investment fund managers wanting to record earnings this year that sold off some of their holdings to make their advertised returns look prettier — window dressing they call it.

From my perspective Google is a $550 to $600 dollar stock giving it full credit for forward earnings of say $20 per share. Last month I questioned why investors would pay next years price this year . I guess Google’s recent vertical leap could only sustain itself so long before other investors started asking the same question.

To find potential opportunities and verify my track record, read Chasing Value or Serious Money.

Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm.

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Filed under: Major movement, Other issues, Rants and raves, Google (GOOG), Market matters, Top Picks 2007

What do you do when a stock that you own is falling on no news? That is the case for Google Inc. (NASDAQ: GOOG) shares which closed down today $31.90 bottoming out at $632.07. This is down from it’s recent high of $747.24, losing $115.17 or about 20%.

When it was going up there was plenty of good news and hoopla to embellish stories of it reaching $2000, but on the way down there has actually been good news too. I could rationalize all kinds of intriguing stories as to why this has occurred but the most obvious is that it got too expensive and traders started thinking it was time to take some profits.

There are also plenty of investment fund managers wanting to record earnings this year that sold off some of their holdings to make their advertised returns look prettier — window dressing they call it.

From my perspective Google is a $550 to $600 dollar stock giving it full credit for forward earnings of say $20 per share. Last month I questioned why investors would pay next years price this year . I guess Google’s recent vertical leap could only sustain itself so long before other investors started asking the same question.

To find potential opportunities and verify my track record, read Chasing Value or Serious Money.

Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm.

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We’ve written quite a bit lately about the mess that the market is in – from mortgage backed securities, CDOs, SIVs and in general malaise striking every bank across the country (and heck, even around the globe); but we haven’t given some practical advice in a long time. Well we’re changing that tonight.

Some people are still looking to buy a bargain and others are being forced to refinance. While it is my position that now is not the time to buy, if you are looking to do so here’s some guidance to get you through a drastically altered mortgage landscape.

Here are Blown Mortgage’s Top 10 Ways to Navigate the Credit Mess (whether you’re a home buyer or a refinancing owner). Sure there’s more than 10 – but it’s a nice round number and should get you off to a good start.

1. Get multiple offers – The mortgage lending space is very turbulent and unsteady. Even large lenders are not sure bets these days; and with mortgage guidelines and programs changing regularly you won’t know if your home loan is done until it’s done. I recommend (regardless of market) that everyone get at least a back up offer; but even more so these days, you need to have at least two solid mortgage options so that you’re not left at the alter by yourself.

2. Know your credit – Credit has become increasingly tight. To the point where only the people with the best credit have access to the most wide-open underwriting guidelines. Unfortunately if you’re like the rest of America you probably qualified for favorable home loan terms under more favorable underwriting guidelines. Ergo, in order to get the most favorable terms today you need to have the best score possible. You can’t begin this process until you know your score. I recommend myFICO.com to figure out and manage your credit score (and yes I get paid if you sign up); but I’ve been recommending myFICO.com for years before getting any compensation and use it myself.

3. Improve your credit scores – This goes with the above. You need the highest score possible. No matter what your score in 9 out of 10 cases more points are going to mean lower rate and better terms. Once you have your baseline credit score with myFICO.com talk to your mortgage consultant about rescoring you to a higher score. A good mortgage professional should be able to share with you a few options to improve your score quickly. See my 5 part credit series for more information. We’re looking for quick wins here with minimal pain. It may be that a mere 10 points reduces your interest rate by a quarter or makes a program available to you that you currently don’t qualify for.

4. Give yourself time – You need to give yourself time to prepare the strongest case for gaining financing (see #5). This means that if you know you have to refinance in a few months (due to your ARM resetting or option arm recasting) you need to start working now on your finances. Even if you are 6 to 12 months out – start working now. Order a copy of your credit report, eliminate frivolous expenses and begin to build your saved assets, repair or correct erroneous or derogatory credit items, bone up on your mortgage IQ so that you can have a clear picture of your options when it comes time to shop.

5. Build a strong case – Over the last few years banks wanted to give you money. Now, they are looking for reasons not to give you money. (That’s a generalization and not entirely true, but it captures the sentiment.) So you need to build a strong case for financing including a strong credit score, sizable savings or other assets that cover at least 3 to 6 months of your mortgage payment, stable credit history (no big new liabilities or credit card balances), and more. Start laying the foundation as soon as possible to build the strongest case you can for financing.

6. Pull your documentation together – Now is as good a time as any to review your current mortgage note, and read it to see if you have 1) a prepayment penalty 2) adjustable rate mortgage features or 3) negative amortization. If you have any of those understand when they come in to play and plan accordingly. Then be sure to get together the rest of your necessary documentation ahead of time so that you can provide an accurate assessment of your financial situation early in the loan process. This will do wonders for you in terms of shopping for a home loan and closing your transaction quickly.

7. Do the appraisal yourself – If you are buying a property do the appraisal yourself; from a self-selected appraiser. You need to get a real market value, not an inflated one based on the highest comparable sales in the market. Talk to your appraiser and insist that they use realistic comparable sales and that they are conservative with adjustments such as upgrades, etc. Then you have to do the due diligence yourself to ensure that the deal is really “a deal” in that market area. Use a trusted Realtor and do the leg work yourself. Your “deal” may be a rip off in 6 months if you make an uneducated decision.

8. Know your options – Do you have to buy? Can you rent? Do you have equity in your home to refinance? Should you refinance? Should you short sell? Should you buy a foreclosure or a short sale? Can you modify your loan or lock in to a fixed rate? Know and consider all of your options before diving blindly in to the process. The water is too rough to make a decision unprepared.

9. Don’t delay – Once you decide to move forward get the process completed in an expedient manner. The longer your home loan financing drags on the more problems it becomes exposed to. Rate lock expirations, changing mortgage underwriting guidelines and the reduction or elimination of mortgage products are all very real possibilities as you move through the financing process. The sooner you’re out of the line of fire the better. Financing that seems available today may be gone tomorrow. That’s reality people. Plan and act accordingly.

10. Get confirmation at every step – Documentation is key in any financial transaction of this magnitude and is especially helpful in such a tough market. Get copies of rate lock commitments, revised good faith estimates and loan applications, purchase agreements, short sale offers, everything. Keep them in your file and ensure that the output of the process matches the agreements that you have committed to each step of the way. This ensures that your interests are protected through out the process and you get what you started out looking for.

There are obviously more steps to mortgage financing and buying and selling in such a complicated market; but these are 10 that can get you off to the right start. What do you think? What else would you add?

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Filed under: Other issues, Good news, Google (GOOG), Apple Inc (AAPL), Amazon.com (AMZN), Intuit Inc (INTU), Politics, Green Stocks

Not long ago, Al Gore seemed like a has-been. Then he snagged both an Academy Award and the Nobel Peace prize.

Will these accolades persuade him to run for president again?

Perhaps not. Perhaps there are more effective ways to enact sweeping change. To wit: Gore has become a partner at the esteemed venture capital firm, Kleiner Perkins Caufield & Byers. The firm has invested in such game-changing companies as Google (NASDAQ: GOOG), Intuit (NASDAQ: INTU), and Amazon.com (NASDAQ: AMZN).

Gore’s job is a no-brainer — focusing on investment opportunities in greentech. And there are likely to be some mega winners. After all, the global energy business is about $7 trillion.

Actually, Gore is no stranger to business and technology (hey, didn’t he invent the Internet?) Keep in mind he sits on the board of Apple (NASDAQ: AAPL) and is an adviser to Google. Gore says he will donate 100% of his Kleiner salary to the Alliance for Climate Protection, which focuses on accelerating policy solutions to the global warming crisis.

But, as part of the powerful Kleiner, Gore will have a great platform to try out his ideas and perhaps save the world.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates DealProfiles.com.

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Filed under: Other issues, Good news, Google (GOOG), Apple Inc (AAPL), Amazon.com (AMZN), Intuit Inc (INTU), Politics, Green Stocks

Not long ago, Al Gore seemed like a has-been. Then he snagged both an Academy Award and the Nobel Peace prize.

Will these accolades persuade him to run for president again?

Perhaps not. Perhaps there are more effective ways to enact sweeping change. To wit: Gore has become a partner at the esteemed venture capital firm, Kleiner Perkins Caufield & Byers. The firm has invested in such game-changing companies as Google (NASDAQ: GOOG), Intuit (NASDAQ: INTU), and Amazon.com (NASDAQ: AMZN).

Gore’s job is a no-brainer — focusing on investment opportunities in greentech. And there are likely to be some mega winners. After all, the global energy business is about $7 trillion.

Actually, Gore is no stranger to business and technology (hey, didn’t he invent the Internet?) Keep in mind he sits on the board of Apple (NASDAQ: AAPL) and is an adviser to Google. Gore says he will donate 100% of his Kleiner salary to the Alliance for Climate Protection, which focuses on accelerating policy solutions to the global warming crisis.

But, as part of the powerful Kleiner, Gore will have a great platform to try out his ideas and perhaps save the world.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates DealProfiles.com.

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Countrywide Financial reported today that its access to capital necessary to fund loans and ongoing operations may become incapacitated if its current debt obligations are cut to junk status.  According to Market Watch:

“Our ability to place custodial deposit accounts on deposit with our bank subsidiary could be affected if our credit ratings were reduced below investment grade,” Countrywide said in a Form 10-Q filed Friday.

Not being able to place custodial deposits at the banking unit would disrupt Countrywide’s ability to originate and service home loans because lenders must establish these accounts to hold the borrower’s mortgage payments.

As of Sept. 30, up to $5.5 billion of Countrywide’s custodial deposit accounts on deposit with the bank could be affected if the credit rating fell into junk status, according to the filing.

Countrywide already dodged a bullet during the height of the current round of the credit crunch by tapping credit lines and negotiating a deal with B of A to inject $2 billion in to the company.  Part of the strategy to get around the credit crunch for Countrywide relies on switching its originating activity over to their banking arm which improves their access to liquidity including capital from the Federal Reserve in exchange for appropriate collateral as needed.

Obviously when Countrywide dodged the first bullet no one was naive enough to suggest that they made it through the wilderness; but ratings agencies (who are already held in shaky regard due to their misrating of mortgage issuances) need to do their job of properly rating debt to protect investors and other parties.  If they cede their ratings due diligence to Countrywide’s capital needs it will be another large black mark on an already tarnished reputation for the likes of S&P, Moody’s and Fitch.

What do you think?

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Filed under: Google (GOOG), Employees, Rich in America

When Bonnie Brown signed on to provide services as a masseuse to the staff at Google (NASDAQ: GOOG)’s home office back in 1999, I wonder how she felt about receiving stock options as part of her compensation. At the time, the company was a 40-person Silicon Valley start-up, one of thousands snatching up venture capital, the vast majority of which went out with a whimper by the time of the tech crash.

Bonnie evidently stuck with it, though, and as a result is now a multi-millionaire. According to The New York Times, she has established her own charitable foundation and spends her time traveling and finding good uses for her money.

The Times reports that over a thousand people own over $5 million each of Google shares and options, and current and former employees hold options of over $2 billion. While new employees continue to gain stock options, the days of exponential growth such as Brown had experienced have no doubt passed, which makes me wonder if this might not drive the best and brightest to look for work with companies at an earlier stage in their development cycle. Google might be a little concerned about attracting too many people who are simply looking for a safe, dependable place to work. Those people are not the innovators that it thrives on.

Kudos to Brown, who deserves to benefit from her willingness to take risk. I, for one, like to see money ending up in the hands of the kneady. (Sorry!)

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Filed under: Rumors, Google (GOOG)

Every day, there is something new in the news about Google, Inc. (NASDAQ: GOOG). The company has spent the better part of 2006 and all of 2007 preparing an “Act II” to ensure the constantly growing revenue heap if receives from text-based internet advertising doesn’t lead to the “all eggs in one basket” scenario that has worried many shrewd industry watchers and investors for years. While Google’s revenue from internet advertising is still growing every quarter by leaps and bounds, the company needs to share the love into other areas. Well, the revenue love, anyway.

Google has signed more high-profile advertising partnerships this year and just recently released details on what I consider to be one of its most ambitious projects to date — the mobile phone operating system. Google, always the one to wrestle tight control from the corporate shaft-meisters and give it to the people, wants the mobile phone to be an open standard usable by any customer on any device.

What freedom lies ahead, eh? It’s scary for wireless companies, but exciting for customers and for Google’s budding aspirations in the mobile advertising arena. With that said, the company’s shares recently reached for $750 per share but have gone back to sub-$670 levels as of this morning.

Ryan Jacob of the Jacob Internet Fund thinks Google’s shares are poised to climb up to the $1,000 level with the momentum and reach the company has at this point. While the financial fundamentals make Google’s current valuation seem almost laughable, that’s never stopped the share prices from some companies from reaching astronomical levels before.

Hype is a real word and reach into the future sometimes, while being viewed as skeptical, creates that “irrational exuberance” situation detailed from Alan Greenspan all those years ago. With Google, is the company’s share price really “irrational” or would this be one of a handful of companies that really does justify its share price based on so many future unknowns? Will you ride it to the $1,000 level or will you end up falling off as shares level out?

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Filed under: Google (GOOG), Employees, Rich in America

When Bonnie Brown signed on to provide services as a masseuse to the staff at Google (NASDAQ: GOOG)’s home office back in 1999, I wonder how she felt about receiving stock options as part of her compensation. At the time, the company was a 40-person Silicon Valley start-up, one of thousands snatching up venture capital, the vast majority of which went out with a whimper by the time of the tech crash.

Bonnie evidently stuck with it, though, and as a result is now a multi-millionaire. According to The New York Times, she has established her own charitable foundation and spends her time traveling and finding good uses for her money.

The Times reports that over a thousand people own over $5 million each of Google shares and options, and current and former employees hold options of over $2 billion. While new employees continue to gain stock options, the days of exponential growth such as Brown had experienced have no doubt passed, which makes me wonder if this might not drive the best and brightest to look for work with companies at an earlier stage in their development cycle. Google might be a little concerned about attracting too many people who are simply looking for a safe, dependable place to work. Those people are not the innovators that it thrives on.

Kudos to Brown, who deserves to benefit from her willingness to take risk. I, for one, like to see money ending up in the hands of the kneady. (Sorry!)

Read | Permalink | Email this | Linking Blogs | Comments

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Filed under: Rumors, Google (GOOG)

Every day, there is something new in the news about Google, Inc. (NASDAQ: GOOG). The company has spent the better part of 2006 and all of 2007 preparing an “Act II” to ensure the constantly growing revenue heap if receives from text-based internet advertising doesn’t lead to the “all eggs in one basket” scenario that has worried many shrewd industry watchers and investors for years. While Google’s revenue from internet advertising is still growing every quarter by leaps and bounds, the company needs to share the love into other areas. Well, the revenue love, anyway.

Google has signed more high-profile advertising partnerships this year and just recently released details on what I consider to be one of its most ambitious projects to date — the mobile phone operating system. Google, always the one to wrestle tight control from the corporate shaft-meisters and give it to the people, wants the mobile phone to be an open standard usable by any customer on any device.

What freedom lies ahead, eh? It’s scary for wireless companies, but exciting for customers and for Google’s budding aspirations in the mobile advertising arena. With that said, the company’s shares recently reached for $750 per share but have gone back to sub-$670 levels as of this morning.

Ryan Jacob of the Jacob Internet Fund thinks Google’s shares are poised to climb up to the $1,000 level with the momentum and reach the company has at this point. While the financial fundamentals make Google’s current valuation seem almost laughable, that’s never stopped the share prices from some companies from reaching astronomical levels before.

Hype is a real word and reach into the future sometimes, while being viewed as skeptical, creates that “irrational exuberance” situation detailed from Alan Greenspan all those years ago. With Google, is the company’s share price really “irrational” or would this be one of a handful of companies that really does justify its share price based on so many future unknowns? Will you ride it to the $1,000 level or will you end up falling off as shares level out?

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