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.

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