The crème de la crème

While this market has prices, support levels, portfolio values, and our emotions playing teeter-totter, some stocks show their true colors by not declining. Is this resistance to the markets' flu a case of leadership (the bulls' argument) or merely an ephemeral levitation (the bears' argument)?

Investing in this type of market environment is akin to swimming upstream while the down-streaming flood keeps battering us, impeding our portfolio's progress. This does not equate to a full stop, only a temporary slowing; a California Roll, so to speak. Certainly, if this sell-off worsens — which seems possible given the setup of the markets in general — then even true market leaders such as Google/GOOG could decline. ("Well, shiver me timbers!") However, I have no certainty the market will continue this decline, nor how low is low even should it continue. Recognize realities, however; markets do decline, and even the most powerful stocks can develop a sniffle when the market catches the flu. (Note that EBAY, SYMC, and AAPL -- each a former upside leader -- have lost that status.) If this decline were to become sufficiently nasty, then even Google/GOOG could retreat to its redoubt.

In acknowledgment of this budding reality, I reduce to the irreducible, to my redoubt: Johnson&Johnson/JNJ, Starbucks/SBUX, and Whole Foods Markets/WFMI, etc. (I do not suddenly exclude AMHC and RTSX, etc, but rather highlight three especially attractive long term investment opportunities.)

And, of course, Google/GOOG, which quickly becomes the lion's share of my portfolio. (BTW, etymology lesson: "lion's share" = all; not most.) You see, despite my remonstrations, the bears still do not understand that Google/GOOG is a singular opportunity. The comment below is an example, from a regular visitor [here] but posted elsewhere:

IMO, there is not enough history on GOOG for much of any TA. FWIW, I suspect some sort of a "broadening wedge" being formed on the daily... don't even know what to make of it, but I suspect there is something bearish about it... at the least might be due for a larger correction. I see trendline resistance right now at 231-32.I was long an "odd lot" of the thing until a few days ago. ER, I believe, went short...

[click to enlarge]

To which I say, "Pshaw, show me this 'broadening wedge.'"
(And it is from here that #$@ %^*&^* Blogger obliterates my post while uploading, with nary a record of it anywhere. I can only try to re-construct the post but alas, it will be less brilliant than its prior incarnation ;-)

This next chart (below) shows that GOOG and the NASDAQ COMP (green squiggly line) moved in tandem, almost lockstep, since GOOG's IPO... until mid-March 2005, that is. Then they diverged. The question is whether GOOG diverges positively and will play engine to the market's caboose (the role of leader) or whether the COMP (and the general market) diverges negatively and will play engine to GOOG's role as caboose; in the end pulling down GOOG with it.

[click to enlarge]

Well, I know the future for Google/GOOG. Just as I know the longer you doubt both it and me, the higher in price and value GOOG will go; that the price available today is a mere fraction of its final high. (This will be the moment you finally decide to jump aboard.) By the bye, what type of pattern is GOOG building since 18 April...?