Gaga for Google

I love google and everything they do. Google.com is my homepage and I use just about every feature on the Google Toolbar (which is the BEST software product in the WORLD….in my opinion).

Check out this simply AMAZING map tool. It’s a version of Google Maps where you can actually view satellite images of any location you enter. You’ll see what I mean: Google Maps (click on “satellite” at the top/right).

They are extremely innovative, fast-paced, a money-making machine and OVERPRICED.

Google is in a quick-growth phase. Take a look at a yearly chart:

It took only 5 months for the stock to double, not uncommon, but this is a stock with a $50,000,000,000 market cap. ($64 Billion at the time of this writing). The P/E ratio for Google has been over 140 for quite some time….it’s like a bull maket relic!

I’m sure there is tons of money to be made with the Google stock, but I am going to stay conservative and not buy. “Everyhing reverts back to the mean” according to Warren Buffet, who was also one of the few investors to come out of the tech bubble in a profit.

Take a look at a five year chart I pulled of Google:

Viewing the yearly chart really shows the rapid growth of Google. While I love ‘em, I feel paying for a stock trading with a 140 P/E spells disaster in the longterm.

I’m looking to open an E-Trade account in addition to my current Ameritrade account. E-Trade allows you to buy specific international stocks, and I’ve had my eye on a few lately.

I could really go for a Google Lunch right now.
Ciao.

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    Blog posted on: April 26, 2005

    10 comments on “Gaga for Google

    1. Arf

      You’re right about Warren Buffet. He refused to invest in overpriced technology companies during the bubble. He was criticized as “not being with the times” but he was one of the few that came out alive and kicking. Love the blog.

      Arf

      Reply
    2. The Angry Attorney

      True, GOOG’s P/E is ridiculously high, but it is also a growth company right now….and unlike many of the ’90′s dot.com’s, it is making money.

      That said, I have also chosen not to invest in GOOG. Too rich for my blood (and I invest in small cap growth), and too much risk. GOOG, however, like SIRI, is a great “trading” stock, if you are into that kind of thing.

      Finally, GOOG’s valuation is crazy. Thing is, if they are smart (and they are), they will put that money to work and learn new tricks. I think that may be where GOOG’s true value lies.

      Reply
    3. Currency Trading

      Careful with Foreign Equity… although foreign stocks are a great way to diversify, some brokers charge heavy fees to trade them… it may be cheaper and more effective to invest in ADRs or nyse/nasdaq-listed mutual funds which hold foreign equity.. depends on your circumstances…

      J Kunken

      Reply
    4. Anonymous

      While GOOG is a growth company at the moment, it has to grow a lot just to catch up with its current valuation.
      I also believe it is a trding stock as I believe the battle between shorts and enamoured longs is only now heating up.

      As far as Jim Cramer is concerned. let’s keep his call in perspective:
      he hated GOOG at $90 IPO price
      he loved it 1st time it reached 200 something
      when GOOG dropped to 180, Cramer hated it and recommended buying YHOO
      now that GOOG is 200 plus again, Cramer jumps on the bandwagon and compares GOOG to BRK.A.
      I would not listen to Jim Cramer and his buy high, sell low calls.

      Reply
    5. Cap

      I sold all the GOOG I had, which was very little from the funky public bid IPO from way back. heh.

      as mentioned, the valuation was just too much.

      I didnt own enough to warrant any pretty profit, but its nice that it paid off. Initially was just going to dump it after the traditional jump the few days after the IPO.

      knowing when to sell is an important factor. Its been mentioned before, but people have a tendency to keep their losers and sell their winners.

      - stock’s super over valued.
      - you bought it for wrong reason or made a mistake
      - company’s fundamental is going down the drain
      - you need the money

      will I beat myself over the head for not keeping GOOG if they do even better? not really.

      still, I do like Google as a company, regardless of how their stocks performe.

      Reply

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