Google, from Steve Leslie

October 31, 2007 |

GoogleToday Google crossed the $700 level. I heard an announcer comment that it is up 30% in a month. In a year and a half it has doubled and since its IPO it has increased in value 10 times.Apple is now approaching the $200 level. In two months it has gone from 135 to 195. In a year and a half it has gone from 55 to 195. Now here is the rhetorical question from the balcony: how many of us own either stock?

There have been plenty of opportunities to have owned either or both. Vic and Laurel commented, when Google was at 350, that they were aboard. They practically hammered the computer keys extolling the virtues of Google and its competitive advantage. My question is: if you don't own it, why not? Better yet: if you have never owned it, why not?

For the record, I currently do not own either stock. I have in the past, but chose to trade rather than hold. I suggest that for those who do not have these two in their portfolios there be a bit of soul searching and analysis and that the lessons learned here be used in the future to identify the next great stock or stocks. A meal for a lifetime.I hope that my portfolio currently has at least one or two that will mimic these two great stocks. Time will tell.






Speak your mind

6 Comments so far

  1. Sherman McCoy on October 31, 2007 12:01 pm

    As Warren Buffet said, “wait for your swing”. All one decision stocks(Cisco,IBM,Xerox,etc.,etc.,etc.,ad nauseum,ad infintium) eventually correct. Many (Enron,Tyco,Worldcom) collapse. If Google didn’t exist, we’d have to invent it.

    Tech is famously competitive, and somewhere out there is a brick with Google’s name on it. I’d rather bet that Microsoft figures out a way to closes its relative gap than be a part of the herd. In the end, the herd will lose either by getting in too late, or not selling when that time ineveitably comes.

  2. Barry Gitarts on October 31, 2007 9:07 pm

    Steve, Why don't you own AAPL & GOOG now?

  3. gabe on October 31, 2007 10:18 pm

    Just because valuation was insane at 350 doesn't mean it can be more insane at 7-800 and stay for whatever period it pleases. I almost pulled the trigger at around 300 but I remembered the St. Petersburg paradox has not been solved yet. Nothing grows at 50% in perpetuity.

  4. steve on November 1, 2007 11:02 am

    My reply:
    I mentioned I dont own goog or aapl because i chose to trade rather than hold. I did not say buy it now. I said learn from the lesson of not owning great stocks.

    If you dont like goog or aapl that is fine. there are plenty to choose from. after all that is what makes markets.

    give me some.

    I like gamestop and I like the action in Microsoft here.

    perhaps valuation is not the best parameter to judge google by. was it an insane valuation at 70?

    What difference does it make. If you make money you make money. sounds like sour grapes to me. A broken watch is correct twice a day.

    100 shares of goog at 70 would be now worth 70,ooo in 3 years. I saw where the chef in the company kitchen is now worth over 25 million dollars. through owning the stock.

    I am not as weathly as the cook. not nearly.

    One last thought, I suspect part of the reason for the meteoric rise in Goog and AApl is that growth portfolios and mutual funds are piling on. They cannot afford to own at least some of both stocks or explain to a host of disgruntled shareholders why they dont. The momentum guys are in control here. Therefore this could be a self-fulfilling prophecy, so to speak. They feed on their own success. I agree that there is a likelihood that should many managers choose to dump the stocks that there will be a vicious correction and that the doors will not be big enough to get through before one gets trampled. Unfortunately none may predict when this will occur. And for now the price of Goog is 700.

    I think oil is exhibiting this characteristic now that traders cannot afford to be short oil and must therefore either be out or long the contracts.

    In mutuals funds it is not so much what the performance is but how it is compared against others in the peer group or style group.

    Last thought, There will be a time when value comes back into fashion as we saw through the early 2000’s when growht took an amazing hit and money moved over to its counterpart. Once again I am not so prescient and would choose to hedge my play by spreading out my money and thus my risk.

  5. Katherinen Nelson on November 1, 2007 12:27 pm

    Because a lot of analyst out there still see the market as cyclical and therefore the more price is going up the more reasons to expect that price will go down. Guess what, computers and the internet are here to stay and we–Western civilization/consumers will not go back to horse and buggy. The scientific progress is not cyclical. Even is you include a paradigm of ever evolving market into equation these two young guys…Brin and Page will lead the way. They’re dynamic as well as Jobs; not your old corporate type. That’s why so many “experts” just don’t get it.

  6. gabe on November 1, 2007 7:41 pm


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