Alphabet Inc.
GOOGL
position
long
Bill Nygren, Harris Associates
Thesis
Alphabet's spending on 'Other Bets' depresses its earnings, inflating the stated P/E multiple. Adjusting for this spending and the cash on the balance sheet reveals that investors are not paying much more than a market multiple for its core Search business.
Did it work?
inconclusive
confidence: low
Without specific price performance data or a defined time horizon for the thesis, it's difficult to assess whether the investment thesis has played out. The argument regarding Alphabet's spending and its impact on earnings remains valid, but without knowing how the market has reacted or how much time has passed, we cannot determine the outcome.
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