Big Oil and Big Brother Google
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Have You Seen This?

Have You Seen This?

 

                                   Big Oil and Big Brother Google

 

 

I hope everyone enjoyed their long weekend. I know I did. But I’ll also freely admit – I always look forward to getting back in to the office after a holiday.

 

The financial markets are the most dynamic of beasts. They give you something new and different to chew on every day. It’s a constantly shifting landscape. On a daily basis, you have to be ready to shift gears quick in response to trader’s fickle sentiment.

 

For instance, on August 19th we noticed a pronounced shift in sentiment toward one solar stock, Canadian Solar (Nasdaq:CSIQ). That stock was up 17% in the days following. And you’d think the entire solar sector had received an upgrade.

 

By August 22nd, a handful of double-digit gains could have been made, based off that one event with Canadian Solar. Canadian Solar is still holding 10% or so of its gains, while other solar stocks have given all their recent gains back.

 

                                     Think Long-term, Act Short-Term

 

Of course, over weeks and months, the recent rally for solar stocks will be just a bump on the charts as longer term business and economic trends play out. I’ve been bearish on traditional “Big Oil” stocks for months. I just can’t see how – with virtually no new discoveries and rising costs – a company like Exxon-Mobil (NYSE:XOM) can see its stock price rise. Record-setting profits or no.

 

And Exxon recently broke below $80 a share for the first time in nearly 2 years. That was well before Hurricane Gustav was even a blip in the radar.

 

We’ve been having good results with small, dynamic exploration and services companies all year.

 

Today, oil prices may be responding to Gustav-relief. But there are much bigger issues for oil prices. Commodities are dropping across the board as the OECD has slashed growth estimates for Japan and Europe to 1.2% and 1.3% respectively. England’s 1.2% estimates appears to be a best-case number, as the OECD acknowledges that the UK economy is looking recessionary.

 

Surprisingly, the US is doing better than expected. Growth estimates here rose to 1.8% from 1.2%. With a strengthening dollar and rising exports, perhaps the rally that began on July 16 hasn’t been complete folly.

 

 

                                     This Time, I’m Cheering for Microsoft

 

One particularly important-sounding headline that greeted me this morning was the latest in the Google vs. Microsoft heavyweight battle. In case you missed it, Google is launching an Internet browser, called Chrome, to compete Microsoft’s 8th version of Internet Explorer.

 

Internet Explorer is the dominant browser with 75% market share. With no vested interest, I’ll usually pull for the underdog. It’s always nice to see the little guy win. Of course you can’t really call Google “little” anymore. This is a battle of titans with Google weighing in with a $146 billion market cap to Microsoft’s $248 billion cap.

 

We all saw Microsoft crush Netscape. And WordPerfect. And any other company it could. But I’m pulling for Microsoft and Explorer 8 to thoroughly pound Google’s Chrome into the cyber-canvas. And I’ll tell you why.

 

Google is a remarkable company. It pretty much created the paid search industry. And it’s now a major determinant for all Internet traffic. In other words, if you’re not picked up by Google’s search functions, you ain’t sellin’ squat.

 

Trust me, I’m in the publishing business and we do much of our work on the Internet. And I consider my relationship with Google downright Faustian. On the one hand, with its paid search results, Google has made Internet advertising simple and effective, albeit a little expensive.

 

But on the other hand, Google is very specific about the free results that it will display when you search for specific information. In fact, if you don’t construct your website with a Google-approved design, you’ll never show up in their search results, no matter how relevant your solution to a query might be.

 

                                                      Free the Internet!

 

Google’s strict and mysterious search criteria has spawned legions of companies that do nothing other than try to figure out what Google’s search algorithms are looking for. And of course, those algorithms change every few months.   

 

In a nutshell, Google is attempting to take way to much control over Internet commerce. And it seems to me, if it gets a massive share of the Internet browser market, Internet commerce will become Google commerce. 

 

So how’s Microsoft going to help? Mainly, by keeping what websites we visit at least semi-private. Here are a couple quotes I’ve come across today…

 

“[the new Explorer’s functions include]…privacy changes that could prevent it [Google] from collecting information related to the effectiveness of its ads, quick-linking to Microsoft mapping and other offerings and a more robust search bar that is also more Microsoft-centric.” -- D: All Things Digital

 

Microsoft…released a new version of Internet Explorer last week for testing. The software lets users control whether it saves the sites they've visited.” Bloomberg

 

We all know that many company websites put “cookies” on your computer when you visit. The cookie can then track your steps and report its findings back to the company for marketing purposes.

 

Maybe I’m being too Orwellian here, but the thought of Google taking sole control of Internet advertising scares me a bit. If I have to align myself with evil Microsoft to maintain Internet commerce freedom, then so be it. I won’t be using Google’s Chrome browser any time soon.

 

                                       Friday’s Investors Insight Discussion

 

As you know if you read last week’s entry, the moderators at the fine website Investor’s Insight (www.investorsinsight.com) asked if I’d be willing to host a live forum discussion event on their website. I agreed and it’s happening this Friday, September 5, from 11:30 am to 12:30 pm, ET.

 

It’s totally free. All you have to do is sign up with a valid email address at the website. Then you can listen in to the discussion and ask questions if you like. I expect we’ll be talking mostly about my stock-picking machine TRIGR and what investment opportunities it’s been turning up lately. But this is an open forum discussion so you’ll be free to bring up any topics for discussion.

 

Again, I’ll be hosting a live Internet discussion  at www.investorsinsight.com on Friday, September 5 between 11:30 am and 12:30 pm, ET. I hope you can make it, it should be fun, informative and profitable!

 

Best regards,

 

Ian Wyatt

Publisher

Growth Report

 





Posted 09-03-2008 5:44 AM by Ian Wyatt
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