OK, so I was wrong. Very wrong. And Citi was right, perhaps even conservative with their estimates of Google’s revenue turnaround.
The other day I was sceptical that Citi’s analysis showed Google suddenly reversing three years of declining revenue growth. They predicted that the revenue growth for 2009 Q4 would be 16%.
I scoffed. I figured the fat red line (right) was a more appropriate projection of the data in the graph.
Well, Google’s actual Q4 revenue growth was 17%. That’s the green dot.
Now Bob Bain, who actually knows how to read these numbers, has found a more detailed review. He points out that while net profit was allegedly up fivefold, Google did write off a billion dollars as “impairment of equity investments” last year. I don’t know what that means, but it sure sounds like it’d make last year look a bit wobbly.
Now, check this chart of Google’s share price for the last two years.
Broadly speaking, it shows the share price dropping as the global financial crisis kicked in, and then recovering. Apart from that tiny little downturn in the last week or two, Google’s share price is back up to where it was two years ago.
- The stock market is a long term investment, unless you really want to immerse yourself in the crazy world of the day traders.
- When it comes to the stock market, I haven’t the faintest fucking idea what I’m talking about, and you should ignore me.