Maybe a Pine Tree

Ahknaten -- GOOG take a Sauna

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Let me share a story.

I'm from a Finnish background. If you know Finn, translate the name of blog and you might figure out my name. As a Finn, I love Finnish saunas and I love hot saunas, so I was anxiously awaiting my arrival at the 'Le Spa Scandinave' near Mt. Tremblant in Quebec. They were advertising a 'Finnish Sauna' and so we made a visit. I had asked if I could throw water in the sauna and they told me, 'yes'. So, I walked into the 'Finnish Sauna' (labeled on the door), and people were resting and falling asleep in it. Half an hour later, I walked in again and the same people were still sleeping and relaxing in it, but hardly any water had been thrown. Being a Finn, I needed some 'loyly' mixed with a bit of 'sisu' and threw half a bucket on the stove. Suddenly 30 people ran out, swearing at me in French. They called management and they came and yelled at me for throwing so much water. I explained that Finns like steam, but they insulted me by telling me there was a 'Norwegian steam room' nearby (not a sauna). More insulting occurred, and they asked, 'Have you ever been in a sauna'? Good grief. I wonder if they have ever had a real sauna? They really need some Finnish guidance before they advertise one. My experience sucked, I won't visit that establishment again, unless they figure out what a Finnish sauna really is.

I had a completely opposite experience at another spa location in Quebec. The place was called 'Spa Finlandais' (translation - Finnish Spa), and I was nervous, as I was worried they would butcher the Finnish name. They too had a 'Finnish Sauna', but this one was much better. Instead of having this aversion to steam, they would have an automatic dispersion of water on the 'kiuas' (stove), and someone would come in every so often and pour water on the rocks. Beautiful. Bravo. This was much closer to a true 'Finnish Sauna' and the 'Soumalainen' in me was not insulted by management.

So why am I telling you this story? Well, the Finnish bias in me hates one place and loves the other place. If they were stocks and I used that bias, I would short 'Le Spa Scandinave', and go long on 'Spa Finlandais'. Finns looking for an authentic 'sauna' should avoid one and aim for the other.

With stocks, people do the same sort of thing at times. They find a story and they stick with that story, and that becomes the story as to why they like/dislike a stock. It's not a bad thing, but it's important not to avoid the other stories as well. Fortunately, we have blogs and a wide variety of opinions, and it is best to compile that information and really make your own opinion. With the sauna example above, there may very well be good qualities to the spa I disliked (maybe I would like the other 'Spa Scadinaves' at the other locations, but one important 'factor' seems to have changed my opinion.

Google. Wow, how do I finally talk about Google after all that?
There are certainly people who like the company, and you hear of analysts who pick crazy target prices. I had heard $1200 from one. I hope that's a typo with one extra '0', after a DCF valuation, I come up with $222. GOOG has a LOT of insider selling - that fact alone made me question the company, but, I've had this concern for a long time now. The PE seems still a bit high for me, and although they have growth, I think that growth has been decreasing. If the growth decreases and it is no longer that desirable as a growth stock, will people like the valuation story. I don't think so? Sometimes people criticize me for looking at insider selling, they give arguments like "but the directors need to diversify", "it doesn't mean anything'. I would disagree, and if you'd like to find a great example of insider buying/selling, pull up Factset and look at a chart of MWY with the insider selling. MWY is remarkable. This is a stock that I hated, but it kept going up, and I could not figure out why, until I saw the massive amounts of insider buying. The insiders timed it beautifully. They sold when it was high, they bought when it was low and they kept repeating that. So now you know my thoughts on Google, but just like the sauna story above, realize that I too have biases and that doesn't always paint the complete picture of a stock. It's best if you try to do your own research and convince yourself why you like/dislike a stock. You won't get it right all the time (neither will I), but it's a lot of fun, and you and I will learn a few things along the way.

As for the sauna -- Check out Spa Finlandais, avoid the other, and short Google.