So Google finally had its IPO! Is it wise to buy now? In my opinion, Google may have upside potential, but I would only buy as a speculative position with stop loss order. I don't think Google is a good long-term investment, though.
First of all it has a price/earnings ratio of 150. Having such a high PE ratio means that investors have ALREADY priced in much of the anticipated earnings growth for this stock. With these expectations, if earnings fall short of expectations even a bit, the stock will tumble.
Even more so, MSN and Yahoo have each revamped their search engines to compete directly with Google. These search engines are sleeping giants. And now they're waking up! Msn has even planned to create search from the desktop as well as the use of natural language.
So, at this price, Google isn't a great long-term investment. It can be, however, an interesting swing trade.
