The Deipnosophist

Where the science of investing becomes an art of living

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Location: Summerlin, Nevada, United States

A private investor for 20+ years, I manage private portfolios and write about investing. You can read my market musings on three different sites: 1) The Deipnosophist, dedicated to teaching the market's processes and mechanics; 2) Investment Poetry, a subscription site dedicated to real time investment recommendations; and 3) Seeking Alpha, a combination of the other two sites with a mix of reprints from this site and all-original content. See you here, there, or the other site!

16 February 2006

For Net stocks, wild rides aren't over yet

This article, from the Christian Science Monitor, is as misguided as they come. (But please read it anyway; it is comparatively brief.) Its author builds an argument -- based (almost) solely on Google/GOOG's recent ~$140 price drop -- that "may mean more opportunities for Google to win big - and lose - for investors."

Look, I have suggested before, and reiterate now, drop a zero from Google/GOOG's share price; that is, move the decimal point one space to the left. It is very common for stocks to decline to $33.78 from $47.51; in fact, it happens all the time. If this parallax view offers clarity or comfort, great; if not, oh well. Please recognize that volatility is what creates the opportunities for investors to profit. Although a $140 decline might seem a headline event, it is not. Rather it is an opportunity for true investors to buy more shares. And it has nothing to do with what transpires inside the company; life there continues apace.

-- David M Gordon / The Deipnosophist

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