Is it time to short Google? This is a question that pops up frequently in my mail, and although the short-term answer may be “yes,” the longer-term outlook should temper our enthusiasm for betting against the Web’s reigning searchmeister.  The company is pursuing a course that will put it increasingly in competition with Microsoft, and although it could take as long as a decade to produce a decisive winner, some savvy observers think Redmond’s best and brightest might not come out on top. Granted, there are no few  Microsoft-haters who enjoy saying such things. But merely because they say them out of malice does not necessarily mean they’ll be wrong.

I had lunch yesterday with one such savvy guy, the son of friends of mine from Boulder. He said that many of his college classmates have gone to work for Google and that the most talented innovators among them stand a better chance of having their ideas launched by Google than by Microsoft. I should mention that this young man is quite an innovator himself, having won a prestigious national science competition when he was in high school by producing a mathematical model for crumpled paper. He is currently majoring in applied physics at one of the country’s top universities, and his reviews of high-tech products appear regularly in the column he writes for the school newspaper. In short, this kid is no slouch.

GOOG vs. MSFT

He says Google’s functional capabilities are within easy distance of Microsoft’s, and that in any case, Microsoft has locked itself into mediocrity with a best-selling office suite whose main components, Excel, Word and Outlook,  cannot – and indeed, have not -- much improved over the years. Keep in mind as well that it was Google that came up with a search tool, Google Desktop, that made it possible for PC users to find certain files on their hard drives in a tenth of the time it once took to find them with Microsoft’s search tool.

Of course, Microsoft, with its all-but-inexhaustible cash hoard, can never be counted out. But as much might have been said of the dozen companies that comprised the original Dow Jones Industrial Average. Of that once-formidable group, only GE remains.

***

A Lurker’s Rant

I never cease to be entertained by lurkers who think they know all about Rick’s Picks just from reading the free commentary I send out each day to numerous Web sites. Here’s a savory note from one Roger Bobosky, a correspondent evidently of the indignantly bullish persuasion. The Rajah has taken umbrage at my suggestion here yesterday that there might not be enough suckers around to lift the market significantly if stocks wafted higher on the opening Thursday. I present his note in its entirety, since mere excerpts wouldn’t give you the mephitic savor of his criticism. This is Bobosky's second appearance in these pages, and probably his last, so enjoy! He writes as follows:

“I know, I know, Ricky Williams [sic], it is IMPOSSIBLE to predict what “Da Boyz” will do on any given day. But, “Da Boy” -- aka YOU -- make you Same Ol' Same Old,  SSDD, LAUGHABLE AS A MOTHERF***** daily, die-trying, Diss efforts at predicting them!!!

“How many years has it been since Manipi, i.e. Citi, has been predicted by Ricky Crackerjack to be a *DEFINITIVE COLLAPSING CRASHOLA* during its WILD(ly boring) ~$5 swings? "We made great money again, my faithful followers, with our puts 'n calls...strangles and straddles...on the $45.999 to $46.001 swings to those CRITICAL pivots my microscope cited!"

South African Golds

“LoL Heheh, yeah, and tell us again how you never, ever, EVER-ever-ever lost one stinkin' penny on DOODIE=SAS=SOUTH AFRICAN S*** the Ricky lemmings bought those mega-mega 100 or 200 _block_ shares at $5.50, $5.75, $5.50, $5.00, $4.75, $4.25, $3.75, $3.50, $3.25, $3.00, $2.90 and every dime down to $1.40? Hmmmm, I dunno, but my TA always told me to include a fair amount of FA, too, and in DOODIE=SAS's case, the applicable rule is "Management SUCKS, so AVOID the dumb clucks!

"Pillaging shareholders w/ dilution out the wazoo and enriching themselves with cheap options...scamsters to the max no different than every American company you bash. LoL It's OK to be a hypoccrite and invest in these PM Pigs, like certificate printing press GSS, etc., 'cause they gots the REAL money we'll be carrying to the grocery stores and gasoline stations, along with our trusty files, saying "How many shavings of silver for that slab o' sirloin today, Mr. Butcher?" and "How many slivers of dust must I file from my maple leaf in order to fill my fuel tank today?"

“LMFAO! Yup, so much metal, PRECIOUS metal, that has taken, what, ONLY SEVENTEEN YEARS to return to the mid-$4.50 mile marker, with which all fiats will be replaced for the world's 6 billion Crackerjacks to conduct barter. Ahhhhh, what a dream! Quaalude Delusions of every fugly goldbug spanning (spinning) the globe.

Lemme Guess?

“Hey, one other question before concluding my intrusion?. Would your pivot-pointing TA please point me to the last time the stock market was doomed to debacle, as you see it, WHEN THE DOW JONES UTILITY INDEX WAS IN ONGONG RALLY MODE AND TODAY AT THIS NOON-TIME HOUR IS WITHIN ABOUT A POINT OF ALL-TIME RECORD HIGHS??? Uhm, lemme guess, "It's Different This Time," eh? ;-) I could be wrong, but I bleeve the answer is NEVER! Then again, maybe that stupid lil' factoid never made it to your corner of the trading floor where you were shitting your pants fretting "CRASH!" every day while shilling every trader opposite the positions you were staking.”

A mixture of Romanische and Gulla, perhaps? Interestingly, Bobosky’s screed scans more or less intelligibly, and if I understand his message correctly there is a kernel of wisdom in it – a point on which I mildly agree with him. That is, he seems a tad skeptical toward the shares of South African gold producers. Although I hold some of them in my kids’ portfolios, I’m inclined to agree that U.S. and Canadian miners inspire more confidence, since they are not subject to the political and currency pressures of their South African counterparts. On the positive side, though, stocks like Durban Roodeport Deep, Harmony and Gold Fields have the potential to explode if bullion prices keep rising as they have been.

The Record Speaks

Concerning the rest of Bobosky’s criticism, I’ll stand on my record. In fact, just when his message arrived we were exiting an S&P trade that capitalized on my third straight bulls eye in the Mini S&P. Reprinted below is the verbatim recommendation, together with a chart that references my hidden-pivot swing points. You can judge for yourself:

(Click on chart to enlarge)