The world’s most valuable retailer, Alibaba, carries no stock.
The world’s largest taxi company, Uber, owns no cars.
The world’s most popular media conglomerate, Facebook, creates no content.
The world’s largest accommodation provider, Airbnb, owns no property.
The creation of intangible value through internet assets has been a popular trend in modern history. In the past this has led to disastrous vicious-cycles, (similar to positive-feedback-loops), that can cause an economic system to descend into chaos.
Speculation on the value of internet assets was what caused the .com bubble of 2000 to inflate - burst. The bubble that popped in 2000 was an asset price bubble that resulted from the explosive stock market growth as the internet emerged. Another period of rapid tech development is almost upon us; in the future it will be referred to as the Machine Learning, AI, and/or Quantum Computing revolution.
Having said that there's the possibility of enormous technological growth in the near future, I'm not saying it will happen tomorrow. The United States could very well end up in another recession if the economy doesn't react well to the unprecedented treatment it's received from the Federal Reserve, ZIRP, etc.
Irrespective of the domestic/global economic landscape, technological progress is inevitable. As time passes the electronics humans use worldwide will only get smarter, faster, and more advanced.
Technological progress sees no regression.
(unless you work at Apple... Iphone 6s > Iphone 7)
Google's new texting app Allo will be their alternative to Apple's I-message and Facebook's Messenger. Allo comes with Google's new virtual assistant built in; Similar to (Apple/Siri, Android/Cortana).
Like all of Google's "free" products they use your data to improve their business operations. If you read my Alphabet Article, you'd know just how many business operations Google uses your data with.
With Allo it's different. As a machine-learning based artificial-intelligence program, Allo will be able to use all of it's users messages as raw data for machine learning algorithms. Alphabet/ Google will likely have a program capable of human-level intelligent conversation within a year.
"When the people find that they can vote themselves money, that will herald the end of the republic".
- Ben Franklin
Alphabet Inc. is a pseudo-diversified (all-tech) holding-company with subsidiaries in several fields. The focus on tech reduces Alphabets diversification but increases the likelihood businesses can work together. Strategic partnerships are far easier in a holding company, where it is not uncommon for resources to be shared.
For example, If Google Capital had a significant breakthrough in machine learning, not only would their company be successful; but the new machine learning knowledge would improve operations at other Alphabet subsidiaries too.
List of Alphabet Subsidiaries
Youtube - The popular video service was acquired in 2006, significant source of traffic for Ads.
Search - Google's search feature was the original website.
Android - Google's mobile operating system was released in the 2008.
Maps - A similar project to Google Earth, brings traffic Ads.
Apps - Integrate Googles "free" online apps into your business. Apps include Gmail, Google ____ Docs, Sheets, Slides, Calendar, Hangouts, Drive, and Vault.
Ads - The most profitable service offered by Google. Ads will be an invaluable resource to Alphabet while they continue growing their network.
Google Ventures - Any-stage venture capital firm focused on startups in technology, software, research & development, biotechnology, transportation, cyber security, and agriculture.
Google Capital - Late-stage venture capital firm in big data, financial tech, and machine learning.
Google X - Research and Development operations focusing on artificial intelligence, computational neuroscience, healthcare, and biotechnology.
Jigsaw - Technology incubator analyzing and solving global challenges.
Verily Life Sciences - Healthcare, biotechnology, and life science.
Calico LLC - Health care and biotechnology.
Google Fiber - Communications: internet, cable TV, and phone.
Sidewalk Labs - Urban development, infrastructure. "Build a city from the internet up."
Nest - Home automation software/hardware and integration.
Stackdriver - Cloud computing management services.
Vevo - Online music streaming service.
VirusTotal - Anti-virus software that analyzes software and URLs for viruses.
FireBase - Cloud services provider for business developers.
In September of 2016, the number of products Alphabet offers is incomprehensible.
Google was founded in 1998 by Stanford grads Sergey Brin and Larry Page. Their business plan was to create an online search engine, but there were already a number of services available online.
Many of the search engines in the late 90's compiled their results by testing the relevance of keywords against related website data. Google ranked their search results based on the number/quality of links to other sites. This laid the basis for much of modern online marketing.
In October 2015, Google Inc underwent significant structural changes. As a result of growth (and in large part due to their Mergers and Acquisitions) the "Google Family" became a holding company called Alphabet.
Alphabet's corporate changes have little effect on the consumer; but provide the corporation with tax benefits, an easier reinvestment environment, and reduced risk to owners.
Verily Life Sciences
JB3 Investments: Alphabet Subsidiaries
Money stock is a measure of the supply of money in a particular level of the economy.
M1 is banknotes/Coins in circulation + travelers checks + demand deposits
M2 is M1 + savings deposits + money market deposits
Their respective velocities measure how often money (M1/M2) is spent in a given time.
Hypothetical example: 9/20: John bought a coffee from Jill for $5, then Jill bought shoes from Andrew (with the same $5), then Andrew bought fruit from Paul (with the same $5).
9/20 M = $5 9/20 Velocity of M = 3
Post-recession-America has seen an increase in M1/M2 along with a decrease in the velocity of M1/M2.
It isn't a coincidence that the money supply started behaving abnormally after the FED dropped the federal funds rate close to zero.
When the FED is making unprecedented policy decisions; the people should expect unprecedented results.
Is not responsible for your investments.