The Bear Club: GOOGLE

paul

perhaps shorters are also caught up in bubblemania. I remember the dotcombubble and think there is money to be made in shorting. this could possibly be seen as a shorterbubble and perhaps I am as wrong as those that are on the buysidebubble.

I think I am attracted to GOOG by the valuation and huge lockup expiration in Feb. GOOG is valued at more than Shell and a sixth of microsoft. For a free search engine with no real assets in a fickle and competitive market that does not smell right even if it does make money. Its only real asset is the brand as its tech is not patentable is being copied by MSN and Yhoo. I has a bit of cash, 2b I think, but it is not run well and is controlled by two geeks, who donot seem to understand cash control principles eg library. They spend their time blue sky thinking which is great but they are not diversifying and are wide open to the mean lean machine of gates and co who are coming up on the inside lane.

I said I would not short this beast again after it took me out at 190. The 20 and 40d averages look strong and the trend is against the short. I also am aware that every man and their dog in the us is playing this share long and short and a small punter like me is grist to the mill. I only piled in again when it seemed to behave exactly as gap and crap play on Friday. In such a play I should really close after gaining 2 bucks but being so close to the Jan lock up and with such a clear failure at 200 the hint of a double top has kept me in. The put/call ratio for goog has been heading low as has the vix which suggests to my contrarian instinct that people are complacent. There does not seem to be wall of calls around 200 which would have made me weary although I must admit to not fully understanding why this should be a catalyst for rising share price if there were such a wall.

I will set my stop at 198 so should not loose too much as I sold at 197.5 ie just as gap broke the previous day high. I think that a valuation of 150 is fair enough ie nearly twice ipo level given lack of transparency and risks involved. Why this figure, not because I am smart but BoA has this as a target.

You may be right that there are safer stocks to short but I can't really seem to find any stronger candidates using my limited etrade cfds. The only other one that I am thinking about is BOC whose chart looks very toppy but this may reflect more strenght in sector which is on an up at minute. The market looks to be headed up and is likely to take all other boats with it.
Any other short suggestions welcome. I am looking at currencies at the moment and the obvious pair is the eur/usd however that is too obvious and I think that the big players will take out my stops no matter what I do. A analyst on Bloomberg tiped the far east currencies for a rise against the dollar but etrade does only the usd/yen. In meantime gbp/euro looks like bounce.