Thomas H. Kee, Jr. on why Google tops Apple in the stock market.
Google has become the darling of tech investors of all types, from institutional investors and fund managers all the way down to mom and pop.
It’s well diversified, its business model is open source in many ways and it isn’t directly subject to the whims of fickle consumers like Apple is because what they provide comes in all sizes, shapes, and forms — not just in a few gadgets.
Let’s see, almost 90-percent of Google’s revenue and almost all of the profits are tied to… drum roll, please… advertising. How is that considered diversified in the face of Mac, iPhone, iPad, iTunes, Stores, et al at Apple?
Kee wanders into mumbo jumbo land for a few paragraphs but never really says anything beyond the ludicrous.
Apple ebbs and flows on the demand for iPhones, but Google is in much more than just the phone business.
Google’s ‘phone business’ is a tiny sliver of the company’s revenue and profits, the vast majority of which come from one line item: advertising. Personally, my view is that the stock market is little more than legalized gambling, often run by charlatans. How well a business is run (growth, revenue, profits, etc.) has little bearing on the stock price.