Thursday, October 20, 2005


I appreciate google. I love google. There are few things I don't like about google. I use google extensively, whether it be as a calculator, mapper, directions providor, picture finder (e.g Britney Spears picture finder), package tracker, ISBN looker upper, dictionary, phone book, or what you all use it for: search. I use features of google that most people haven't heard of. I'll post some of my tricks sometime. (here's the first one: I do not go to to search, I goto "google suggest.")

I read the entire prospectus before google went public. I loved it. It was honest. It was bold. I intrepretted part of it as the founders saying "don't buy us, we don't want to go public, but it has become too expensive not to."

I love the plain english that is found on any page google writes...(see the faq).

I love google's politeness. I love google's hippie culture. I love that google only hires the smartest minds. I love the concept behind adsense. I love google's constant innovations. I love google.

But I will not buy their stock. I could have bought a huge chunk at 85. Today its at 335....a little over a year later! When I read their prospectus before they went public I knew it would go up. But its not my investing style. I buy when things go down because of investor psychology. I knew google would go up because of investor psychology. I don't buy when things go up....thats trading with your heart and not your brain....noone's brain tells them to jump on a bandwagon. (If I knew it was going to go up, why not buy and cash out...because if a stock goes up because everyone is hyped over it, then it can go down just as quickly thanks to negative news...when do you jump off the rise?....too hard to guess...and thats just it...its a guess).

Is it worth 335? I don't think so. Is it worth 30? I don't think so.

The truth is I don't know. Noone knows. Analysts pick all kinds of ranges for their stock price. I'm just going to admit I don't know. Google is not microsoft. Microsoft is a near monopoly. Google is hardly a monopoly. I love everything about Google. They are as innovative and honest as anyone out there. They are run like I would run a company. So how could I not like them. I would put everything they do and are on par with microsoft. That is a huge statement.

But if they are equal operationally, innovatively, intellectually, and cross-sectionally why would you buy google stock? All else being equal I'd rather buy the monopoly who's been doing it for a few decades. Microsoft has been doing what google is doing since google's founders were in grade school. Everyone else is bidding up the price of google's stock hoping that they will be the next microsoft....when the next microsoft is microsoft. MSFT hasn't lost a step...only their stock price has. Which means its undervalued.

But go ahead keep buying google, while I buy microsoft...and use both of their products/services religiously.

Never invest/think with your heart...hearts don't make good decisions.


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