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RVB's Market Musings

What began here as an avenue to interact and learn has far exceeded those goals.

If you are a prospective employer, please consider this site a place where you can see my passion for investing...

Thursday, July 21, 2005


Another favorite topic of mine - Google.  Google is good. 
I laugh when I see Cramer write the "GOOG" on his four fingers and then makes a fist, shows the camera and starts screaming about Google (GOOG is Google's ticker symbol).  Again, I am neutral on Cramer and his opinions, he's just one man.  But people think he's nuts, calling GOOG the one stock that personifies our economy.  You know what?  I think he's got this one exactly right.  I'll bet I do 15-20 Google searches a day.  Because it's the best engine - period.  And man, do they make money.  They've won the search engine battle, and the technology is almost, gulp, mature.  So NOW the ad revenues, and gmail, and blogger (yep this site is a google site) can start ringin' registers.  We got it wrong in the 90's when speculation ruled.  We thought advertising on the internet was the next automobile.  It turns out we were right - we just got the timing way wrong.  Now, Google's the Internet winner, and it actually has evidence to prove it.
Cramer says GOOG is worth $450 in the future.  People say, "That's just too high."  Investors say, "It can't get that high.  It will burst, just like the internet stocks in the 90's."  A guy in a meeting I was in yesterday said, "Man, I shoulda bought google."  Well, shit, that's easy to say.  But why don't you buy it now?  The answer is fear.  And, in my opinion some misunderstanding.  Like I said above, GOOG is NOT like an internet stock of the 90's.  It's 2005 - and they've won the race.  But that fear is has a neat effect on stocks that fly high.  The more fear there is towards it - the higher it propels the stock.  The market has a wonderful way of making the majority wrong. 
So how do we play this?  It can be scary buying a stock with a chart like GOOG's.  It's done nothing but go up.  It's not a stock for everyone - it can be volatile, no doubt.  Although, with a $300 dollar stock, owning fewer shares does help shake out some of the volatility.  And one earnings warning, miss, or statement that appears to be lower than the high expectations could see the stock tumble.  But, the stock is still new, and I don't think it's well understood enough yet for people to have expectations thaht are too high. I think it will take some time yet for GOOG analysts to catch up with the company.

The bottom line is that GOOG's a winner, and this investor doesn't think it's done just yet.


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