For some reason stock trading is still running rampant in the market despite all the evidence to the contrary that it is a bad idea. It is a bad idea to pay fees and taxes (or take losses, even worse) no matter how low because they eat away at your overall returns. It is a bad idea because the basis of the decision to buy or sell has little or no fundamental rationale except momentum, or charts, or news of the day, or analysts' calls, or a Cramer rant. But most importantly to me it is a bad idea because all of the most successful and wealthiest investors do the opposite -- Warren Buffett, Bill Miller, Eddie Lampert and Carl Icahn just to name a few.

Since history has proved over and over and over that day trading is a loser's game, why do it? The only reason I can think of is for the adrenaline rush. It's the sport of it. Just watch Cramer and you can see the crazed sports fanatic looking for a fix. He makes it exciting! He makes it an adventure! He needs something to talk about!

If he followed a process enjoyed by Buffett or Miller his show might be on the air monthly instead of several times a week. Instead of frantic or manic gyrations he would be making a few boring comments and calm suggestions about a few stock possibilities before encouraging his viewers to tune in next month. Cramer and other traders have built up business as a sport and as entertainment. But, if you want to get rich, follow the investors not the traders.

Through the month of June it seems that it remains a stock pickers' market as Google Inc. (NASDAQ: GOOG), James Cramer of TheStreet.com and I all topped the indices. Google continued its strong move upward battling me for the lead, while Cramer lost much of his gains of last month competing to stay ahead of the indices. Cramer is sticking with his NYSE Euronext (NYSE: NYX) pick, and it continues to drag him down. Earnings reports still trickle in but nothing major has affected the market. Mergers and acquisitions are a bigger story and something seems to be happening every day. This is my sixth follow-up report. It is not a long time, but short of a major change in the global economic picture it looks like 2007 will be a good year. For reference, check out my original Dec. 28, 2006 post on this topic.

There seems to be growing support for large cap stocks which analysts have been talking about but now might be starting to show up for real. The Dow Jones Industrial Average has been the market leader among the indices and may indicate that investors are finaly giving large cap stocks their due. It also may indicate that the global economy is doing better as a whole than the national economy. There also may be some flight to safety. That said, June seemed more cautious then May except in foreign markets as indicated by the strong rise in my Chinese picks. Investors moved the S&P 500 index to new highs.

In June of 2006, after a month of writing for BloggingStocks, I wrote about our original "Great 8" stocks. Amazingly this is my 300th story - never thought that was possible. It's been fun and educational. During the last few months I started three special sections with the coaxing of Amey Stone and with the coaching of Sarah Gilbert. I decided to go back to the beginning and review the original "Great 8" again and see how my discussion points panned out.

In the past year the Federal Reserve Board has sat on the fence leaving interest rates untouched, however, their hemming and hawing has moved the market at times as fear and greed and speculation had the usual effect of jiggling the market from time to time. Housing starts have fallen steadly to scary levels in some parts of the country. The Iraq war is still on the front pages as the death toll increases and President Bush's influence evaporates.

In last year's report I said "there are no bargains yet, but there are some very interesting developments in the fundamentals" - - so what now?

Apple Inc (NASDAQ: AAPL) was the big winner to the upside in the past year followed by Google Inc. (NASDAQ: GOOG). Time Warner Inc. (NYSE: TWX) aided by the influence of Carl Icahn, major stock buy-backs and changes in AOL and the cable business, has also performed well. The following were the four things that seemed noteworthy at the time. All of them were relevant to what happend.

1. TWX has a very low price-to-book ratio.
2. GE has powerful products to sell -- literally: aircraft and standby power engines, water resource management and equipment. Plus it has a strong dividend.
3. WMT had a very low price-to-sales ratio before and it is still extremely low at .64. While the stock price is going nowhere and has not for years they seem to be creating more shareholder equity. They are a huge company so the prospects are that they move up slowly over time but are not goin to be exciting to watch -- unless they are building one next door to you house.
4. GOOG has an extraordinary return on invested capital (ROIC).

Here's my take on all eight stocks:

The month of May was all about stock picking as James Cramer of TheStreet.com has come roaring back after a poor showing in April. Google also made a strong move upward. After languishing for three months it has come close to its all time high. The Dow Jones Industrial Average (DJIA) set so many new highs that it is not news anymore. Earnings reports still trickle in but nothing major has affected the market. Mergers and acquisitions are a bigger story and something seems to be happening every day. This is my fifth follow-up report. It is not a long time, but short of a major change in the global economic picture it looks like 2007 will be a good year. For reference, check out my original Dec. 28, 2006 post on this topic.

The DJIA has been the market leader among the indices and may indicate that investors are finaly giving large cap stocks their due. It also may indicate that the global economy is doing better as a whole than the national economy. There also may be some flight to safety. That said, May was not a time of caution. Investors moved everything upward with even the S&P 500 index reaching a new high. Cramer took back the lead and for the first time the indices lagged.

It was reported yesterday in The New York Times that Google Inc. (NASDAQ: GOOG) has come down to earth sending staffers with cameras through five metropolitan areas taking pictures from the ground to integrate with the ever popular Google Earth site.

Already there are complaints about privacy issues, perhaps displaying people at their best and frequently at their worst -- nothing new to Google. It has so many data centers, collecting and storing personal information in the form of emails, click-throughs, searches, site visits, purchasing, etc. These billions of data points -- maybe trillions by now, and growing -- are pushing the limits of personal privacy. Google is not alone but it certainly is a leader in the assault -- always with the purist of motives, it says.

If absolute power corrupts absolutely, then to paraphrase ... absolute information gets out absolutely. It is just a question of time. And even if it does not "get out," how many of the thousands of people on the inside and their affiliates have access?

In the mean time, Google's stock has gone up, up and away this past week, nearing highs not seen in six months. It closed yesterday at $497.91 and opened this morning at $501.00. That has to make shareholders delighted around the globe.

Meteorologists have been reporting that we are in for one heck of a storm season, hurricanes that is -- will they name one Google? Hmmm? I don't think we're there yet.

Those of you who are new to BloggingStocks can check out my other stories and read Chasing Value or Serious Money to find more potential opportunities and verify my track record as well.

Sheldon Liber is the CEO of a small private investment company and the vice president for design and research at an architecture & planning firm. Check out his other posts for BloggingStocks here.

Every day there are numerous stories, articles and blogs about how Microsoft Corp. (NASDAQ: MSFT) is in trouble because its search and advertising models cannot compete with Google Inc. (NASDAQ: GOOG). We hear that Microsoft is so far behind, and so inferior, that it might be in a quagmire from which it can't escape. In other words, Microsoft has become stodgy and passe'.

Steve Balmer, the Chairman and chief advocate for Microsoft exclaims constantly that this is not true and the world is blind to the power of Microsoft -- "just you wait and see!" He appears exasperated every time the comparison comes up and the question is posed as to how he will compete with the Google onslaught.

My first two posts on this site last year were about Microsoft and Google. I was thinking about last year and decided to look back and see how the year unfolded for the two companies. Here are the surprising results. Microsoft actually was the better stock investment over the last 12 months, rising about 35% to Google's 26.5% (25% better). It does not appear that Microsoft investors have been suffering all that much!

Furthermore, MSFT is paying a dividend and GOOG is not. I would also argue that Microsoft, while not a bargain right now, is fairly valued and that Google is at least 10% over-valued on fundamentals despite a spectacular earnings report. From my perspective, given the risk factors inherent in the younger Google, it may be even more over-valued. Certainly its stock price would suffer more on an earnings miss.

This just goes to show you that all the noise in the market place is just that -- a lot of noise, because Microsoft is doing just fine. I do not own shares of either stock and have never held any position in either, but if I was to buy one today it would be Microsoft, it is the better value and safer bet after months of market appreciation.

Those of you who are new to BloggingStocks can check out my other stories and read Chasing Value or Serious Money to find more potential opportunities and verify my track record as well.

Google Inc. (NASDAQ: GOOG) has been up the past couple of days and I thought I would highlight the positive side. The rise in the stock price is modest given the share price recently traversing the $465 to $475 range over the past week. But, up is up and except for people shorting the stock nobody ever lost money with a rising share price.

One of my favorite reads recently has been James B. Stewart of Smart Money who wrote Google Is Best-Positioned to Dominate Online Ads in his Common Sense column. Stewart likes Google and makes the argument that though it seems to have been facing a slight head wind the past few months after surpassing $500 six months ago, it might show up on some stock screens as a value pick soon.

• "Google boasts a rather modest forward price/earnings ratio of 35, a price-to-earnings-growth, or PEG, ratio of just 1.09, and a beta of less than 1. At this rate it will be showing up on screens as a value stock. Yet surely the jury is now in on the fundamental question about Google's search business: It is a natural monopoly."

Sometimes I receive a comment from a well-reasoned individual who views things differently than I, and makes it worthwhile for me to reconsider my position. When I wrote, Google me this shareholders: Do you STILL feel lucky?, there were certainly those who shared my view and others who did not. Naturally, the vast majority in both camps do not take the time to comment, but here is one comment I wanted to share:

• Comment from Steve:
  How can you say they overpaid for Youtube? Really, the share price in the 2 weeks following that deal added $22 Bill in value to the company.
  
  There seems to be a strength to google in every move they make. The more you utilize their services, the more you want to!
  
  They are the new generation media player... and for that $250 Bill is within reach

Well, here's my answer, this is how:

There is a lot of group think on Wall Street among the funds and investment houses. A lot of them own Google Inc. (NASDAQ: GOOG) because it was and is the hot story and if they are wrong they know that they would all be wrong together. This gives them a feeling of safety. That way if Google goes down in value they can say, "Hey we all thought..." And so Google has become one of those "must own" stocks.

If you stand by yourself you get the blame all by yourself. Not a good place to be for lemming analysts and fund managers. So, what happens if a few funds break ranks and start dumping some shares? It could get ugly because of the group think mentality. Nobody will want to be standing naked on the shoreline when the water recedes. To use another common metaphor anybody standing in the doorway may get trampled by the rush to the exits.

Brian White wrote Google gets downgraded: is the sky falling? earlier today and no one can be sure, but if group think helped pump up the stock and group think helped prop it up the past few months, then group think can send it down over the summer until someone in the group breaks rank again.

As one example of my trouble with Google's valuation, it has a Price-to-Sales ratio of almost 18. For you non-value investors, this is ten times the price a value investor would be interested in. While there is plenty of room for discussion and perhaps some would say it is only 8 times that which a value investor would pay, it is none-the-less far from a good buy. I do not know what Google shares will do but I think this is just more supporting evidence for the Graham / Buffett concept of value investing which leaves you with plenty of downside protection...with or without any group think.

Those of you who are new to Bloggingstocks.com can check out my other stories and read Chasing Value or Serious Money to find more potential opportunities and verify my track record as well.

Disclosure: I have never held any position in Google and do not now..

Sheldon Liber is the CEO of a small private investment company and the vice president for design and research at an architecture & planning firm. Check out his other posts for BloggingStocks here.

Last year in the midst of Google Inc. (NASDAQ: GOOG) euphoria I wrote Google me this Batman: Do you feel lucky? stating that Google was a great company but was not worth the price. Soon after when I posted 10 Reasons I think Google is going down, I received negative comments suggesting perhaps I shorted the stock just because I thought the price was ridiculous, however, it did go down...and then recovered with numerous positive earning reports and overzealous analysts calls. Google has hit a wall for the time being ( 4 months) and all of the ten reasons remain intact. It is still an overvalued one trick pony.

Now all the analysts making pronouncements about Google being $600 to $800 per share have gone into hiding and the downgrades are starting to appear. They overpaid for YouTube, Doubleclick and $300,000,000 per year for the next three years to News Corp (NYSE: NWS) to gain certain rights to MySpace seems like panic buying rather than shrewd investing.

Yahoo Inc. (NASDAQ: YHOO) has followed this same strategy, buying and buying and buying new pieces to make itself whole and capture market share, and that it did, all in an effort to prop up its sagging share price. Google will be okay in the long run. It will just not be a $250 billion company any time soon, as people hoped and prayed.

Those of you who are new to Bloggingstocks.com can check out my other stories and read Chasing Value or Serious Money to find more potential opportunities and verify my track record as well.

Disclosure: I have never held any position in Google and do not now..

Sheldon Liber is the CEO of a small private investment company and the vice president for design and research at an architecture & planning firm. Check out his other posts for BloggingStocks here.

Each passing generation seems to accept a greater level of intrusion into its life. When George Orwell wrote 1984, most people were aghast at the level of scrutiny by "Big Brother"-- this doesn't seem to be the case anymore! We accept that cameras follow us all day long, our email is screened and our wireless communications are not protected by the constitution. We accept that the president does not need a warrant to tap our phones if he thinks we are a risk to national security, or even just says so ... or perhaps we do not accept that last.

Our great grandchildren will have access to information about us that will give them insights never before imaginable. They will understand what made us tick better than ever before. There will certainly be internet archaeologists. They exist now, but they're called data miners.

Some day soon you may have an internet memory chip in your head that is installed at birth, giving you instant access to all data ever created -- a real memory chip. As scary as it sounds, it may be coming. Each generation accepts a greater level of techno insidiousness; just look at all the people happy to have a phone sticking out of their heads. Perhaps people will first have cell phones implanted in their heads before memory chips. Not only will it happen, but future generations will ask their grandparents why they wouldn't want such a thing.

This is an update through April 30, 2007 after many companies have reported their first quarter earnings and the Dow Jones Industrial Average (DJAI) passed the 13,000 watermark and set new record highs. We are still in the midst of earnings season. This is my fourth follow-up report. Not enough time to prove much but plenty of time to make or lose some money. If you want to refer to the original article from December 28, 2006 see: You don't have to be 007 to find the best picks for 2007!

This month an interesting trend took hold. Even with the indices reaching new highs and many stocks doing so as well, it seems there must be some caution in the wind. This is the first month that my value approach lead the pack and Cramer's approach, whatever it is, took a back seat. Not only is Cramer lagging each of the indices, but four of his six speculative and growth picks were down while all three of his value picks were up. Google seems to be dead in the water for now, having reported tremendous growth and beating analyst's guestimates again by a wide margin, it still has not gained any traction even in an up market.

In July 2006 I posted Google should buy Starbucks -- NOW! and received many less than favorable comments. I was way too glib in my post and that took away from the serious points I was trying to make. Google Inc. (NASDAQ: GOOG) is still a one-trick pony. Yes, they bought YouTube but they are far from generating profits from that. They paid $1.65 billion for this acquisition and contracted with News Corp's (NYSE: NWS) MySpace (TM) for another $900 million in a collaborative effort, and spent millions more on legal matters, further site development costs. All told they are probably approaching $3 billion in cost for these two deals, and will carry losses until some future date when they make some money, but so far what have they done?

They are making some money with Google CheckOut (TM), a quasi PayPal (TM) competitor owned by Ebay Inc. (NASDAQ: EBAY) but nothing to write home about. Googles other initiatives amount to offerings that are all "me too" add ons that dilute the Internet further but add nothing new. If gmail did not exist people would not be missing much and that can be said for many other things they have explored.

Once in a while, out of curiosity, I check the metrics on various companies. Today I decided to fly by Amazon.com Inc. (NASDAQ: AMZN) given yesterday's upbeat earnings report. But despite all the good news, what did I find? Simple, the numbers stink! To paraphrase Shakespeare: A dog by any other name... would still smell.

What in the world is going on in the minds of investors that would bid up this company to a valuation over $22 billion and a trailing P/E ratio double that of Google Inc. (NASDAQ: GOOG)? As I write this post AMZN shares are above $56, up over 25%, adding $11.50 to yesterday's price.

The following is an excerpt from the earnings' release:

Net income increased 115% to $111 million in the first quarter, or $0.26 per diluted share, compared with net income of $51 million, or $0.12 per diluted share in first quarter 2006. First quarter 2007 effective tax rate was 23% compared with an effective tax rate of 47% in first quarter 2006.

In architecture and construction there is an old adage that comes to mind regarding the personal privacy we are afforded from Google or any other large organization, 'If water sits, water leaks.'

To paraphrase, 'If information sits, information leaks.' Well Google Inc. (NASDAQ: GOOG) has a database of user information that is growing exponentially faster than the company. It is increasing the amount of data it has and that it collects faster than its share price has climbed, faster than the number of employees have grown and faster than cash flows in the door. Tom Barlow discussed Google's ever-expanding interest in your personal internet travels and specific interests when he posted Google: Big Brother's tattletale son? last week.

From the beginning Google has always wanted to be viewed as playing fair and feigned a passive quality so as not to sound any alarms. No doubt it had good intentions and no doubt it also knew it might become the 800 lb gorilla in the room.