The Continuum for Google Shares Continues

Yeah, okay, so Google (GOOG) shares 'plummet' -- at least seemingly.

You can read a pretty fair explanation of Wall Street's reception of Google's earnings report here. To Blodget's thoughts, I would add that Google's practice has been not to play the mug's game of 'guidance'. This decision cuts both ways for any stock, up and down, but providing guidance also cuts both ways. I prefer Google continue their practice of no guidance.

Any way you slice it, with the exception of the 'whisper' game, Google's earnings report is phenomenal. Sure the Law of Big Numbers begins to catch up to Google, and other questions arise as a result of this earnings report... But, then, when does an investor ever not have questions and concerns that cause he or she to pause before taking action, if at all? Truth is that, for Google, as with all growth stocks, a declining p is heading towards a (still) rising e, and within its t continuum. (P = price, e = eanings, and t = time.)

The continuum for Google's shares continues as well, despite the noticeable decline Thursday. Price oscillations of ~10% occur regularly for all stocks, although Google's -$50 somehow seems more horrific than a $50 stock declining $5. No, the decline Thursday amounts to intra-trend volatility -- mere noise, not a signal! -- despite its scary nature.

From my perspective, Google still qualifies as a buy. Although not quite yet.

Full Disclosure: Long Google.

Comments

[marketwatchr:]

The Yahoo share holders meeting will impact the price of GOOG. How will be the question resolved after the vote for a new board or not.

2008 Jul 20 07:59 AM

[Ames Tiedeman:]

GOOG is going under 400. Their growth is slowing. You cannot support this valuation with a slowing growth rate.

2008 Jul 20 09:49 AM

[atauber:]

when will the SEC outlaw shorting GOOG?....................

2008 Jul 20 11:21 AM

[georgesconi:]

Tiedeman....I dont own GOOG but are you so obtuse? I mean oops, were not growing at 50-60% when we had 3B in rev.....Were only still growing at 35% with 16B in rev...Oh were sorry, maybe next 3 years will only be 30% bringing Rev of 37B and EPS of 45per share.

Its definitely BUY time with GOOG...and dont think they are not going to conquer the rest of Oceania/Asia (Already 87% share of Australia) and the rest of EC (ALready 84% of UK)...I mean whose getting in the way of these guys.....GOOG will be the first company to EARN $100 per share by 2015/2016

2008 Jul 20 01:32 PM

[Calvin C.:]

My entry point for GOOG: <$440

2008 Jul 22 01:18 AM