Google can become the next Microsoft in 3 years

At the pace that Goog's earnings are growing, it'll reach MSFT's profitability in three years. A difficult prospect since it doesn't have a monopoly in its market like microsoft has in operating systems and office products. Yahoo and MSN have an opportunity to dethrone Google as king of search. A company might be started in a garage somewhere that will become the next google in seven years. People will always have an option for their search engine.

IIT All About - Google Video

IIT All About - Google Video

A video showing what it takes to get into Indian Institute of Technology, and the impacts its graduates have on US business and Indian business.

Citigroup up to 50 by March 06

After this lull in the stock, looks like C can get back up to 50 next month maybe with some good earnings news. The March 06 call option is a risky bet with big payouts.

MOT up to 25 by March 06

With some positive earnings news from MOT or other phone makers, this stock can get back to its 52 week high levels by next month. This makes the call option for March at 25 a risky bet. The new slider version of the RAZR seems to be creatings some buzz in the US after its release in Asia. Still, no other phone company has made a phone that competes with RAZR in cool factor. It's the iPod of cell phones. Even MOT's recent attempts like the SLVR are not getting the attention of the RAZR. Other good news on the horizon is the smart phone PDA based on the RAZR.

Redemption

A front page article in Barron's states Google's stock can trade up to 50% lower than current prices. As written before here and by many other doubters, the stock's valuation cannot be mainatained any longer. Barron's prediction of a price around $188 seems a bit harsh along with an expected P/E of 30. This still seems more rational than the current stock price. The stock's chart price is following the downward part of many previous bubble stocks such as Yahoo or AOL during the internet boom years. Maybe GOOG will come down to extremely low levels and bounce back well like Yahoo's stock over the past three years. Appears to be a good time to make money in GOOG options with the volatility.

Weakness in Goog

this stock has some weakness in the last month. It hasn't had a good rally up since dropping down below 370. I think this could be the beginning of the end for this stock. Look at Yahoo's stock chart after its run up, there's a time when it will stall for a while before it comes down to a reasonable level.

HPQ Put Options

HPQ has had a nice run up, especially today when it moved up more than $1. Currently, the put options for March 2006 are trading at a discounted level. With the stock currently at $32, the put options for 27.5 and 30 are trading at less than $1 each. HPQ should pull back soon after this run up, and the put options can increase in price. Current stockholders in HPQ can also hedge against losses by buying put options at 32.5.

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2006 Tax Guide: Special Edition - Yahoo! Finance

2006 Tax Guide: Special Edition - Yahoo! Finance

Railroad Stocks

nittanylion05@gmail.com
According to a recent study done by a major consulting firm, a 1% increase in price can lead to a 12.3% increase in operating profit when holding other factors constant. Meanwhile cost cutting is nowhere near as profitable since the same study showed a 1% decrease in variable cost only leads to an 8.7% increase in operating profit and 1% decrease in fixed cost equals a 2.6% increase in operating profit. A careful analysis of industries that are able to raise prices, without losing customers to substitute products, can lead to some attractive stock picks.

One of these industries is the railroad industry. The only viable low cost long haul substitute to rail transportation is commercial trucking. Since trucking requires more fuel per lb. then railroads, the high price of gasoline has put trucking companies at a disadvantage. Railroads are able to pass along the increase their fuel costs and raise prices to improve profitability without the risk of losing customers to trucking companies. Also railroads are benefiting from the continuing rise in cross-Pacific shipping and the soaring demand for coal as a powerplant fuel.

Even though many railroads company’s stocks have undergone a dramatic rise in the past 12 months, Burlington Northern Santa Fe Corp (BNI) still has room left for appreciation. It recently announced an increase in its freight surcharge program and signed an agreement with the Canadian National railway to share track and terminals in certain locations. The company has earmarked $400 million for track and facilities expansion between high demand locations and is adding locomotive capacity with advanced technology to monitor track usage. So don’t let the company’s high share price scare you ($78.75) or its $25 rise over the last year scare you, this company is going higher.

Nickel Options

Nickel options are options trading for $0.05. They offer a high reward to risk ratio. At five cents per share, a contract of options for 100 shares costs $5. Nickel options are available on call options and put options where the strike price is significantly different from the current market value. Instead of risking a lot of capital in one stock, an investor can make a small bet on a nickel option and make a similar profit (see Options Profit Analyzer). For example, if a stock is trading at $29 currently, the call option to buy the stock at $35 expiring the upcoming month can be available for $0.05 per share. The market has valued the call at a minimal price because most people in the market believe the stock will not reach the strike price in the amount of time given. However, if an investors believes the stock will reach $36 within one month, he can buy six contracts for the 35 call for $30 ($0.05/share *100 * 6). If the stock does reach $36 before the expiration date, his initial $30 investment will become $600 ($1/share*100*6). Let's say this investor only $1000 dollars to invest. Initially he would have only been able to buy about 33 shares in the company, and his profit from 29 to 36 would have been $221. Instead of risking his entire investment account into one stock, he was able to make a larger profit with less money. The other outcome could have been losing all of his option investment if the stock failed to reach $36 or went below $29. In this instance, he would have lost $60. In this investment scenario, the risk benefit ratio allowed him to multiply his money tenfold. Nickel options and options in general do have the ability to completely eradicate your initial investment, big or small, but their rewards can be extraordinary.