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Wednesday, December 06, 2006

google swap

heres the list for this year. For the Google market cap of 149 billion, one could today buy in their entirety:
Walter Industries (wlt)
Peb Boys (pby)
Petrohawk (hawk)
Finish Line (finl)
Optimal group (opmr)
Nashua (nsha)
Precision Drilling (pds)
First data (Fdc)
Borders (bgp)
Friendlys (frn)
New York times (nyt)
Consolidated energy (cnx)
Fording coal (fdg)
Ipass (ipas)
Kingsway Fiinancial (kfs)
ADC telecom (adct)
United online (untd)
chesapeake energy (chk)
applied materials (amat)
Nabor drilling(nbr)
Patterson UTI (pten)
radio Shack (rsh)
Giffon (gff)
micron (mu)
Hudson city bank (hcbk)
cbs (cbs)
Genlyte (gy)
pacific sunwear (psun)
rosetta resources (rose)
Mirant (mir)

Google has about 3.5 billion in operating earnings. The portfolio sports 16.5 billion or so in same. If google can continue to grow at 30% a year for 7 years their operating cash flow will surpass that of the portfolio..providing of course that the portfolio rate of return remians stagnant and none of the excess 13 billion of operating cash flow is reinvested at any reasonable rate . should the portfolio rate grow at the 10 % level..not unrealistic considering the amount of excess avaible for reinvestment, it takes google 10 years to surpass in operating cash flow. again assuming that they can grow at 30% for the 10 years and no one comes along with better or new technology and reduces their competitive advantage. Of course we all know that in the stable world of technology that is unlikely to happen.

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