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July 18, 2008
Bad Analysis Drives Google Down
Google stock dropped despite the fact that they made 35% more money this year than during the same quarter last year. The reason for the drop? They came up short of analyst projections!!!
I just don't understand the lemming mentality of the market. Why punish Google by driving down the price simply because some "analysts" made projections that were too lofty? Shouldn't you punish the analysts instead? Don't the investors who bought on the basis of faulty analysis bear some responsibility for acting on that bad analysis?
It's as though we've gone back in time to 1999, when analysts said the sky was the limit for so many dot-coms. Never mind that many of those dot-coms had no semblance of a business plan or even any way to make money. Flash forward two years, and all those companies start to implode. It was soon discovered that some of those "analysts" were just shills trying to make money for their bosses. So why do investors still depend so heavily on the words of analysts?
Google MADE more money this quarter than they did last year! Shouldn't they be rewarded for doing well DESPITE a sluggish economy? I just don't understand.
Posted by MD Wong at 11:24:03
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