Walk On Bye

Baidu (BIDU), China's Internet search engine, has generated a lot of interest among stock analysts (here and here) although the analyst opinion is not uniformly optimistic (here). What do the Random Stock Walker models show?

Unfortunately, Baidu is a random walk. There is some indication in the analysis, however, that if Baidu could link itself with growth in the world economy, it could become a growth stock. The bootstrap forecast above, made using the WL20 model, basically suggests that while there is some upside potential for Baidu, the stock has to get past significant downside risk extending well past 2015. That seems like a long time to wait for growth. And, since the stock is currently a random walk, short-term trading is really just gambling.