Diorex

Almost a year ago I suggested selling Google short.

Here is what the stock looks like since then courtesy of Google Finance.

I ended up shorting 100 shares at 704, but covered way to soon at 520, but that is not chump change.

I used to run a hedge fund and from time to time I make some bets, but I am almost always out of the market except for some retirement mutual funds. This year has been a great time to be out of the market.

The only other trade I made this year was long corn back in February and March and that was a nice win too.

Anyway, with Google now at $311 per share and trading at a PE below 20, I am starting to think about getting long again with no downside hedge. I will probably buy a few hundred shares with an exit price in the high 500’s.

Sure the growth has slowed way down, but there is still plenty left, mostly overseas, but also from Yahoo imploding and basically giving market share to Google.

A few other things I like - they are now starting to take ads on things they used to not in principle, like gambling outside the US or beer and liquor - this could be a few final last straws but I suspect there is some really good money there. They also have lots of talented people who are working for below market wages who now are totally underwater on options packages and thus they will need to work the stock to be able to keep them.

I suspect there are quite a few other levers that have not been turned by the financial guys at Google and now that growth has slowed, that these levers will be strategically pulled in time.

One other trade I am thinking of making is long Oil under $60 with an exit target around $90 in early summer - will probably cover that with some sort of options position in case oil goes to $40.

This entry was posted on Wednesday, November 12th, 2008 at 12:26 am and is filed under Google, Personal Stuff. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.