The Dow Jones Industrial Average eclipsed 10,000 today -- again. Which means absolutely nothing, other than providing a nice round number for the media to use in headlines. The Dow is at the same point it was in February 2000, December 2001, or April 2002. Of course, it's zigged and zagged all around that 10,000 mark throughout 2004. While the index has treaded water, there have been buying opportunities for individual securities all along the way.

In today's Motley Fool Take:

Should You Buy Google?


Bill Mann (TMF Otter)

Google (Nasdaq: GOOG) has done the impossible: It has turned the most anticipated IPO since the black tulip into an embarrassing disaster. OK, it's not really a disaster, but it sure as heck isn't going well.

Yesterday, the Securities and Exchange Commission shut its doors at the close of business without approving Google's registration statement -- a move that prevented the company from trading today. At issue is an interview that Playboy(NYSE: PLA)conducted with Larry Page and Sergey Brin, the two founders of the company, and the fact that this interview violates the "quiet period" that the SEC places on companies around various corporate events. Especially corporate events that involve equity offerings. This comes on the heels of the disclosure that Google had failed to properly register some 2 million shares that it had granted employees and others while it had been in its infancy. These are blocking and tackling kinds of problems, and they've cast a pall over an IPO that already had its detractors.

I would be quick to blame Google's advisors and lawyers except for one thing: It seems apparent that Google and its founders have gotten used to doing things their own way. The moment that management discovered that it had a registration problem (i.e., April), they should have taken the time to get it sorted out before pressing forward with the IPO. Ditto the violation of the quiet period. These were goof-ups, one perhaps more severe than the other, but both have been exacerbated by Google's assumption that it could simply go through with the IPO and deal with any consequences on the other side.

Welcome to being a publicly traded company, guys. The SEC doesn't give a hoot whether everyone else has licked the lug nuts on your cars for the last five years. They don't find the "don't be evil" schtick to be particularly endearing, they just want their rules followed. And you have failed to do so, miserably.

I've counseled from the outset that this was an IPO to be avoided, but not really for the reasons that have come up. Google priced itself at more than 300 times earnings, or at $35 billion. We once called such a valuation a "price-to-dreams" ratio, but although companies may like big, beefy share prices, they can't really control them, usually. But they certainly can control the price at which they offer shares in an IPO, and the price they chose was simply silly. For once the market seems to have gotten it right; both the price and the number of shares offered have been cut, as demand for Google shares has been at best tepid.

Here's what else makes me angry about this: Investment banks will now be able to point to Google's problems as a reason that companies should avoid using Dutch auctions to go public. This method cuts out most of the underwriting work that banks have to do with standard IPOs, lowering -- you guessed it -- the fees they garner. But Google's problems have little to do with the process and everything to do with a whole series of otherworldly bad decisions, made by Google, including the valuation the company granted itself in the first place.

In fact, the model for a "successful" IPO in the post-Netscape days has been a massive first day "pop" in price, even if the result is that the money that the company should have garnered to fund operations end up in other peoples' pockets. This is a bad thing. If Google manages to garner even $70 per share (below its current range), then its IPO will still have been substantially more healthy than any of these "hot," but ultimately destructive, launches. Google may not be the next Microsoft(Nasdaq: MSFT), but it sure as heck isn't the (OTC BB: TGLO) either.

Bill Mann owns no shares in any company mentioned in this article.

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Cendant Steals Home


Rick Aristotle Munarriz (TMF Edible)

Cendant's (NYSE: CD) got many revenue streams, and apparently they all lead home. So perhaps it's understandable to see the multifaceted company pull back from the pending sale of its mortgage business. Last month Cendant revealed that it was in talks to sell its home financing unit. Without naming the suitor -- and not that it matters whether it would have been Countrywide(NYSE: CFC), JPMorgan Chase(NYSE: JPM), or H&R Block(NYSE: HRB) -- Cendant broke off negotiations last night.

The divestiture didn't make a whole lot of sense anyway. You can tie many of its businesses such as its Century 21 and Coldwell Banker realtor subsidiaries to the potentially lucrative art of funding homesteads. Even the company's core of travel offerings such as Avis car rentals,, and its Ramada, Days Inn, and Travelodge lodging establishments can play a crucial role in the relocation process.

So while Cendant may have been looking to cash out of the mortgage market before the historically low rates washed away the sector's value, would it have been worth it? Even if the company were to stipulate that the logical associations between Cendant's businesses remain, what price would those shackles fetch?

Cendant still thinks that it can have its cake and eat it too. The company will still consider other buyouts and strategic proposals. With Countrywide announcing approval for a two-for-one stock split, it's obvious that some key players think that the mortgage business boom is only getting started.

While higher rates are clearly on the way, that doesn't mean that folks will be anchored to their existing homes. So don't give up on the mortgage business just yet, Cendant. You've already got plenty riding on a healthy real estate economy. Why dilute that wager?

Longtime Fool contributor Rick Munarriz has stayed in most of Cendant's hotel chains, but he does not own shares in any of the companies mentioned in this story.

Discussion Board of the Day: Mothers and Daughters

Have you ever been to a Gymboree play center? Was it worth it? What are some of the unique characteristics of the relationship between a parent and a child that go beyond parachute time? Does Mother really know best? All this and more in the Mothers and Daughters discussion board. Only on

Deere's Color Is Green


Seth Jayson (TMFBent)

Tractors are impressive. Don't believe me? Try remaining unimpressed by the power and possibility evoked by the tractor-laden railcars that line the path near the Deere(NYSE: DE) plant along the Mississippi in Moline, Ill. Or pedal across Iowa on RAGBRAI and sneak your flimsy two-wheeler past one of those shiny green behemoths; then tell me you're not awed.

If that doesn't do it for you, yesterday's headlines might. Third-quarter earnings were up more than 62%. Shareholders enjoyed a slimmer, 55% uptick in greenbacks, but that was still $1.58 per ticket. The news looks even better when you consider that revenues rose 23% to $5.4 billion.

Equipment sales provided 90% of the sales total, growing 27%, so while the past few weeks' headlines have left us with an overwhelming impression of decreasing American spending, it looks like folks in need of big, rolling steel were bucking the trend. Despite missing profit expectations, Caterpillar(NYSE: CAT)recently shocked the Street with evidence of strong demand. And even harried automakers such as Ford(NYSE: F), DaimlerChrysler(NYSE: DCX), and GM(NYSE: GM) have posted sales comebacks.

At Deere, the agricultural and forestry divisions saw the strongest sales spikes, 34% and 40%, respectively. Better yet, the units became more profitable because of volume efficiencies and less pressure for discounting. Though shareholders might be tempted to groan at phrases such as "partially offset by higher provision for bonus provisions," keep in mind that happy, rewarded employees make these snazzy quarters possible.

And the crews should remain busy. The company foresees a 35% sales increase for the last quarter of the year, with full year earnings to come in around $1.3 billion. That would put the green machine at a forward P/E near 12, making the firm look awfully cheap compared with the massive earnings growth for this year. Of course, Foolish investing means looking a bit further down the road, when growth should cool. Still, Deere stock has been out of favor for a few months, and given the company's ability to capitalize on sales growth despite punishing commodity prices, shares look like a reasonable value these days.

Seth Jayson was proud to ride in a paceline full of Deere jerseys on this year's RAGBRAI. But he has no position in any company mentioned. View his Fool profile here.

Quote of Note

"Go confidently in the direction of your dreams. Live the life you have imagined." -- Henry David Thoreau

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