http://investor.google.com/releases/2009Q4_google_earnings.html

Net profit up fivefold ?

well, sorta but there is a line for the previous year

Impairment of equity investments (1,094,757) $1,094,757,000

which seemingly had a major effect in 2008

Add this back to the stated profit and then work out the increase in net profit – about 40% by my reckoning.

Expectations must’ve been higher, though, ‘cos shares initially dropped 5%.

It’s been a hectic day. That’s all I’ll add for now. More later, including responses to comments.

Looks like they did better even than the Silicon Alley Insider predicted

- rates of change are as volatile as the underlying value

- values starting off a low base tend to exhibit initial high rates of change diminishing in the fashion of a log function

@Stilgherrian: I’d back a horse, ahem, results more in line with Citi for the next couple of quarters due to GFC-recovery factors. However the longer term trend will be more likely stabilisation at low levels, organic growth not driven by major technology or mindset shifts.

This doesn’t appear to be a chart depicting revenue – but a chart depicting the rate at which revenue is changing (a rate of change).

I would anticipate that a chart of “revenue by period” would be much flatter than this chart (which deals with rates of change).

I spent quite a few months studying Technical Analyis as part of a Graduate Diploma of Applied Finance. Unfortunately I failed because I misread the wording of the exam paper which stated that the hypothetical investor was “long” in the investment being discussed wheras my assumption was that the investor was “short”. The exam paper asked me to offer advice to the investor based on several months of trading figures expressed as a graph. Whether the investor was long or short in the stock was crucial to any advice given with respect to buy or sell decisions the next day. (BTW: I passed a similar test from the safety of my own home but there I had time to read the question -sigh ! )

The most fundamental point I can raise is that nobody can predict the future based on the past – even though those accutely attuned to charting techniques (Technical Analysis) often base buy and sell decisions based on minute by minute trading figures.

I would suggest the graph is misleading given that it appears to relate to rates of change with regards to revenue rather than revenue itself.

There is a book that used to be on the market “How to lie with Statistics” and if you can get hold of it I would recommend it.

I don’t trust a Stilgherrian straight line. I believe Charles Dow (Dow Theory and all that stuff) would also frown on it if he were alive today. I hasten to add there are things referred to as momentum indicators, oscillators and head and shoulder formations in the highly subjective study of graphs.

Here’s a quick tutorial http://www.investopedia.com/university/technical/

Sure, the recession of 09 hit them, but the trend is a lot longer than 09 alone. Strong economy or not doesn’t change the overall trend

Thing is, the insights from these kinds of “analyst” are more akin to racing tips than anything based on hard data.