News: Google

News from CNN:
In retrospect, Google investors should have realized last June that the search giant's era of hyper-growth was over. That's when the company announced that Patrick Pichette, the top operations executive at BCE, parent of Canada's biggest phone company, would be Google's new chief financial officer.

Pichette isn't your typical tech executive: He didn't cut his teeth in Silicon Valley, and his web credentials are thin. No, the far more relevant experience on Pichette's resume was the time he spent heading up a three-year cost-cutting and efficiency drive that reduced operating costs at Bell Canada by $2 billion.

That's right: Google (GOOG, Fortune 500), among the most chaotic, profligate, unfocused, engineering-oriented, and self-proclaimed recession-resistant of organizations, had reached outside the Googleplex for a real business executive and charged him with ensuring that Google's freewheeling culture wouldn't become its own worst enemy.

Call it, in the words of redoubtable analyst Mary Meeker, "Right guy, right time." Just as Google's business has shown unmistakable signs of slowing, Pichette, a 46-year-old Canadian who was a Rhodes scholar and a McKinsey consultant in his younger days, has begun to make his mark.

Since he started as CFO on Aug. 1, Google has shut down numerous projects, facilities, and perks, from the seemingly trivial - an unneeded gourmet cafe at its headquarters, the annual companywide ski trip - to the significant. The latter includes the termination of a major effort called Lively, a virtual-environment product that mimicked Second Life, and the shuttering of a failed acquisition, dMarc Broadcasting, through which Google had attempted to broker radio advertising. In January, Google publicized its first layoffs, the termination of 100 recruiters made redundant because the company has dramatically reined in its hiring.

All this might have happened, of course, without Pichette. Yet as Google confronts a climate in which its once otherworldly growth is merely impressive - revenues grew 18% in its most recent quarter - it has turned to someone ideally suited for the new reality. "Patrick was known for a close attention to details and an ability to drive efficiencies in the organization," says Jonathan Allen, a telecom analyst with RBC Capital Markets in Toronto.

That same attention to detail is turning heads among the analysts and investors who follow Internet companies. In the fourth quarter Google's operating expenditures of $330,000 per employee declined 6% from the year before; capital expenditures declined 46%, to $368 million; and free cash flow jumped 73%, to $1.75 billion. "Investors absolutely appreciated the discipline on expenses," says Tony Ursillo, an analyst with asset manager Loomis Sayles, which holds 450,000 Google shares.

Despite having introduced green eyeshades to Google, Pichette has fit in quickly. An avid outdoorsman - he is known for far-flung fly-fishing expeditions to locales like Russia or the extreme reaches of northern Canada - he bikes to work and took easily to Google's casual vibe. Admirers praise his ability to get along. "He's an extraordinarily clear-sighted operator - almost like an HR person in his ability to read people," says recruiter Martha Josephson of Egon Zehnder International, which placed Pichette at Google. He also astutely knows it's best for a cost cutter to avoid boasting: He declined to comment for this article.

One Pichette fan who appears eager to show his support publicly is CEO Eric Schmidt, who told analyst Meeker at a recent Morgan Stanley investor conference that Pichette is "particularly good at doing business reviews" and that Google is now going through a review process "systematically, business after business."Any other company with a $100 billion market capitalization might be embarrassed to acknowledge that such standard fare was a novel concept. Then again, Google isn't any other company. It can only hope its new CFO helps it stay that way.

Bilibala's comments:

As a company becomes larger and more mature, its sales growth (top line) will slow down.
=> No company can keep growing at 50-100% every year;
In order to extend the company's profit (bottom line) growth, cost management becomes the important driver.

On the other hand, cutting Research & Development cost may hurt a company's future growth.
Google's 90% revenue is coming from its search engine business. Based on Google's annual report, it plans to use 33% of its capital expenditure on new products research. I know 1000s of its new products do not make $$ at all, but as an adventurer, I think it should continue those spending.

So, how to take balance of the two and keep a nice pace for the company's growth? Let's see!!

101 Finance: Create you financial plan

Create you financial plan and stick with it!!

$$ is not and should not be your goal, but it is the tool and solution to achieve your goal.Therefore, when you think about financial goal or investment, the 1st and the most important step is to PLAN!!

"Most peoples are not plan to fail, but fail to plan."

If you don't want to be one of them, you should start planning now, or yesterday (if possible).

Use your pen and paper; write down what you need and when you need it.
If you have spouse or kids, you all should share the thoughts with each other, because some of your goals may require commitment from all the parties and it is a good time to educate your kids to develop their own plans.

News: Toxic Assets & Bank outlook

Here is what Buffett's thought on 1) toxic assets 2) bank industry during the recent interview he had.

Issues on toxic assets:
=> They have not been written down by enough?
=> Or being written down too much?

The interesting thing is that the toxic assets,
if they're priced at market, are probably the best assets the banks has,
because those toxic assets presently are being priced based on
unleveraged buyers buying a fairly speculative asset.
So the returns from this market value are probably
better than almost anything else, assuming
they've got a market-to-market value, you know,
they have the best prospects for return going forward of anything the banks own.
The problems of the banks are overwhelmingly not toxic assets. . .

Issues on bank industry:

=> They are technically insolvent?

=> Or heading towards great profitibility?

The spreads have never been wider.
This is a great time to be in banking, you know,
if you just get past the past and they are getting past the past.
I mean, right now every time a loan is made to somebody to buy a house--
and we're making, you know, making millions of loans--
four and a half million houses will change hands this year
out of a total stock of less than 80 million.
So those people are making good mortgages.
You want those assets on your books and
you get a great spread in putting them on now.
So it's a great time to be in banking, but you do have to get past this past.
But the toxic assets, in my view, you know,
if they've been written down to market,
I'd rather buy those assets from the bank than any other assets they've got.

Believe it or not?

Buffett vs Lots Analysts & Economists in the world

One of the side for sure is totally totally 180 degree wrong!

Who will that be?

Who will you go for?

In the past 50 years, history has proved that Buffett is more correct than anyone else.

Will history repeat itself again or fail this time?

Let's see!!!

(FYI, Berkshire Hathaway has been downgraded from AAA to AA+ by Fitch Rating due to its un-hedge market exposures and potential earning volatility as "inconsistent with stability of an AAA rating company".)

Econ data: 09 week 11

Equity market climb back a lot this week, especially on financial sector.Due to many CEO of big banks came out and proclaimed their companies had a strong Jan and Feb sales, income and capital foundation.

On the other hand, it also reflects some technical rebound from the 12 years' low.From last week's "bottom" to today's peak, Citi up 95%, WFC up 92% and GE up 74%.After such rally, I think it is reasonable to forecast a drop in very short term.If you are a long term investor, it is a chance to buy again!!

Economic Data:
(This week, the data is pretty light)

• US Feb Retail sales ex auto up 0.7% (better, -0.1%), prior up 1.6%. Continue to increasing trend from Jan, which is one of the good sign for economic recovery (only one sign, it may not mean anything);
• US Feb Retail sales down 0.1% (better than expect, down 0.5%), prior up 1.8%. Despite the good sign on retail sales, auto sales continue to go down, if the trends continue, auto industry will be in deep trouble towards bankruptcy. And this is not we would like to see;
• US Jan wholesales inventories down 0.7% (better, down 1.0%), prior down 1.5%;
• US Jan business inventories down 1.1% (better, down 1.0%), prior down 1.6%;
• US initial jobless claim 03/07 up to 654k (worse, 644k), prior 645k;
• Canada Feb unemployment rate up to 7.7%, Feb lose 83k position and up 0.5% from Jan. Kind of expected, no surprise

General Electric being downgraded

Press release from GE:
S&P today announced a single-notch downgrade of General Electric (GE)'s and GECC's long term ratings from AAA to AA+, with an outlook change from "negative" to "stable". The ratings downgrade does not affect GE's and GECC's short term funding ratings of A-1+, which was affirmed by S&P. The action follows a thorough review of GE's portfolio by S&P.

Market reactions:
GE's stock price rise 12.72% to $9.57 because it clear the uncertainty of the company's financial situation.

Bilibala's comments:
Downgrade will have negative impact on GE's long term capital funding and it will also increase its cost of capital, which will trigger a downward adjustment on GE's fair value calculation (at least, that's what I will do.)

I think GE's stock price increase is merely an adjustment/correction from the huge drop down during the previous 2 weeks to a more reasonable level.
Overall, being downgraded is not good news.

News: Google

Another interesting news about Google's community events happened in HKG.Google Map - a service, offer for free, has helped and will help millions of people around the world, especially when you get lost, it will walk with you and walk you through!!

【明報專訊】科技不一定冷冰冰，在Web 2.0時代，網民利用簡單科技，除了上載資訊，更能分享情感。Google舉辦的「畫出『您』想–Google（我的地圖）創作比賽」其中一名得獎者歐智 浩，利用Google地圖的個人化特色，結合GPS科技，記錄了他的58日澳洲 單車之旅，旅途上又因為Google Map和GPS令他碰上不少奇遇。正職繪製地圖的他說，隨着科技進步，地圖不只是地方的紀錄，而是人與地方之間關係的紀錄。

歐智浩去年請 了長假，為的是實現年輕時的理想。他用了58日駕着單車，從悉尼 出發，經墨爾本 、大洋路（Great Ocean Road）、阿德萊德、Nullarbor沙漠到珀斯看日落，全程約5400公里。歐智浩不是單車旅行的先驅，但他運用了職業上的知識，隨身帶着一部衛星 定位儀，每隔5秒自動記錄身處的經緯度，再根據拍照的時間，將照片對照當時的衛星定位，於是旅途上拍下的8000張照片，每一張的拍攝地點一目了然。他再 把其中約180張上載至Google Map的個人地圖，朋友和網民便可分享這一次單車長征。

隨身帶GPS 每5秒記錄位置
歐智浩的職業與地圖有密切關係，對地圖的感受亦特別深，「以往的地圖只記錄地點，但隨着科技進步，今天地圖記錄的是地點與人的關係，大家都可以將非傳統資訊放在地圖裏。其實，每件事發生都有時間、地點，地圖加上文字，便能活生生表現人在該時間、空間的感情」。

最 難忘的經歷發生在荒漠，歐智浩說﹕「那天我準備橫越超過20萬平方公里的Nullarbor荒漠，事前我須準確計算要攜帶多少水，找出最近的旅舍位置。晚 上我躺在地上觀賞漫天星星，憑着Google Map和GPS，得知附近一萬平方公里都沒人住，才發現自己獨享了一萬平方公里的星星」。

澳洲單車長征不是歐智浩的第一個電子地圖作品。曾於攀山拯救隊工作的他，搜集了港歷年郊野公園致命意外事故分佈圖，列出遠足黑點，讓行山人士能夠多加提防，又利用了Google Map作為搜索行山失蹤者的分析等。

下個目標﹕《鹿鼎記》地圖現在，他正努力製作《鹿鼎記》地圖﹕「《鹿鼎記》以清朝為背景，跨越了中國多個地方如揚州、釣魚島等，甚至提及俄羅斯 ，以地圖來講《鹿鼎記》的故事，相信能吸引不愛看書的年輕人閱讀。」明報記者 何雪瑩

Jesus Christ will offer the similar service in your life. HE can walk with you and guide you through your career path and entire road of life. Start reading the bible online, that is your important road map. It is completely free of charge!!For your information. Here is reward winners' master piece:

• 香港幽山美地 120 (Mahler Ka)
• 帶你入東涌踩單車 (SOB Team)
• 日出雪梨，日落柏斯 澳洲單車遊記 (Tommy Au)

I guess, I should design my own too.

Google on Dow Jone?

Google (Nasdaq: GOOG) and Cisco Systems are the top contenders to join the Dow Jones Industrial Average if Citigroup and General Motors are booted off, Reuters reports.
Both Citigroup (NYSE: C) and General Motors (NYSE: GM) are trading below $2 -- although both are nearing that number after substantial gains Tuesday.
Other contenders to join the Dow, which has lost 25 percent of its value this year alone, include Goldman Sachs (NYSE: GS), US Steel (NYSE: X), Visa (NYSE: V) and Apple (Nasdaq: AAPL).
San Jose, Calif.-based Cisco (Nasdaq: CSCO) employs more than 4,000 people in the Raleigh-Durham area.

Bilibala's comment

• All the index funds will buy Google & Cisco and sell Citi & GM;
• Good impact in short term, stock price will rise due to more "buy";
• Bad impact in medium term, stock price will have higher fluctuation, as lesser # of stock supply in the market; also, Google may become a bearish target due to more hedge activities took place on its stock;
• No impact in long term, stock price will always and only follow GOOG's earning per share growth, not the overall market performance.