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#1
11-18-2005, 03:02 AM
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GOOG
I have this odd desire to short a few shares of GOOG just to say I did when it returns from orbit in a few months or years.
I remember wanting to short a bunch of the internet stocks back in '99, but I didn't have any money back then, and I thought "well maybe there's something about this that I just don't get." Turns out there wasn't, more like there was something about it that the shareholders didn't get. I kind of am at the "I don't get it" point with google. Yes, adwords is a very good business. But I see all kinds of things all over the internet about how google is taking over the world, written by people that obviously don't know what the heck they're talking about. It's shades of '99 again. You've got some kid in that "How do I invest $25k" thread saying google "can't go down." This is the kind of talk that makes me want to short and hang on for the ride. eastbay 
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#2
11-18-2005, 12:28 PM
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Re: GOOG
[ QUOTE ]
You've got some kid in that "How do I invest $25k" thread saying google "can't go down." This is the kind of talk that makes me want to short and hang on for the ride. eastbay [/ QUOTE ] Keynes "The market can stay irrational longer than you can stay solvent." Let's say you are (eventually) right, but the mania continues to drive it above $1000 before it eventually falls back to $200. Will you be able to hold on for the whole ride? You would be down 2.5x your equity at the top. Shorts can lose much more than 100%, and the most they can make is 100%. Consider some longer term options instead. You could buy a June 06 $330 put for $13.50, or a $400 for $39.50. Your downside is a max of 100% and the upside could easily be 3x or 4x. Of course, I'm simplifying. The risk of loss is likely higher with the options. But you have the higher potential gain to offset that.
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#3
11-18-2005, 12:38 PM
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Re: GOOG
[ QUOTE ]
[ QUOTE ] You've got some kid in that "How do I invest $25k" thread saying google "can't go down." This is the kind of talk that makes me want to short and hang on for the ride. eastbay [/ QUOTE ] Keynes "The market can stay irrational longer than you can stay solvent." Let's say you are (eventually) right, but the mania continues to drive it above $1000 before it eventually falls back to $200. Will you be able to hold on for the whole ride? You would be down 2.5x your equity at the top. Shorts can lose much more than 100%, and the most they can make is 100%. Consider some longer term options instead. You could buy a June 06 $330 put for $13.50, or a $400 for $39.50. Your downside is a max of 100% and the upside could easily be 3x or 4x. Of course, I'm simplifying. The risk of loss is likely higher with the options. But you have the higher potential gain to offset that. [/ QUOTE ] I understand all this. That's why I said "a few shares". I don't intend to risk my case money on it. I just want to take the action for the fun of it and bragging rights if I'm right. So basically, the answer is "yes, I can hold on for the whole ride", unless it goes to 2000 or something. [img]/images/graemlins/tongue.gif[/img] eastbay
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#4
11-18-2005, 06:11 PM
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Re: GOOG
firstly, i'm the same "kid" who everyone thought was crazy because I picked up google at $120/share in sept. '04....and secondly, i never said google can't go down....this is def not a time to short this stock....the numbers don't justify it....E x M = P...earnings have not been cut into, yet and people continue to pay a premium for this stock...until someone (ebay, msft, etc.) cut into their earnings, there's no reason dislike this stock....but then again, i'm just a kid, what do i know
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#8
11-18-2005, 02:07 PM
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Re: GOOG
I was intrigued by your idea and looked at it this morning, but ended up thinking I just don't think GOOG is that overvalued. True it's at something near 80x PE, but it's also growing 100% year over year. Clearly it can't keep that up. But if it does 100% next year $400 will be only at a 40 PE. I can't imagine it not trading for closer to $600 if that happens.
Barring a sudden slowdown in sales growth, I think you are better off waiting. If GOOG runs up to $600 or $800 in the next month, I'd be much more inclined to take a shot at some juicy puts.
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#9
11-18-2005, 02:14 PM
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Re: GOOG
[ QUOTE ]
kind of am at the "I don't get it" point with google. Yes, adwords is a very good business. But I see all kinds of things all over the internet about how google is taking over the world, written by people that obviously don't know what the heck they're talking about. It's shades of '99 again. [/ QUOTE ] While they're not takign over the world. Google does A LOT more than adwords. I am not very familiar with how the stock market fluctuates, but as someone who works in internet advertising, I'd be VERY surprised if Google isn't a premier company for the forseeable future.
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#10
11-18-2005, 10:01 PM
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Re: GOOG
[ QUOTE ]
[ QUOTE ] kind of am at the "I don't get it" point with google. Yes, adwords is a very good business. But I see all kinds of things all over the internet about how google is taking over the world, written by people that obviously don't know what the heck they're talking about. It's shades of '99 again. [/ QUOTE ] While they're not takign over the world. Google does A LOT more than adwords. [/ QUOTE ] Please tell me what else they make money on. eastbay
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Hybrid Mode
