Tuesday, July 19, 2011
To Sell Google or Not to Sell Google, That is the Question
I bought Google at $537 per share (after in an earlier life buying it at $247 and selling at $320 -- there is perhaps another lesson there). As some of you may have noticed, Google has spiked dramatically to over $600 per share after reporting earnings. I do believe that it's worth much more than $600 ultimately but it's tough not to sell it after the recent upswing because I think the world generally is in for more negative economic news which will once again depress Google. I'll think on this some more but why do I think Google is worth much more? A host of reasons but compare it to Microsoft, which is arguably a proxy for similar growth. Google began life trading at less than $100 per share. It now trades for 6x that. I dare say that Microsoft is now trading at far more than 6x its initial offering price. Yes, I know, there are differences but rough measures in these instances are useful, I think. Also, new computers using Google Chrome are selling quite well. One more step toward the browser as operating system, the "dumb box" computer accessing a smart cloud, and Google eclipse of Microsoft.