Monday, September 29, 2008

Google a Short Term Trade?

On September 29, 2008, I bought 100 shares of Google (GOOG) at around $391 per share and may buy more tomorrow. I am optimistic that once the bailout package is re-worked, it will be passed on Thursday, and the overall stock market and Google stock will increase.

Google has several short-term catalysts:

1. The Google phone (the T-Mobile HTC G1) is set for a timely launch; the iPhone craze has subsided, allowing consumers to notice a competing product; and for now, the G1 lacks any problems, such as the launch problems Garmin (GRMN) is having with its nuvifone.

See U.K. article below for more information on the G1:

2. The U.S. Antitrust Department should not interfere with the Google-Yahoo deal. Jeff Jarvis has an excellent article on this issue:

[T]he problem with going after Google is that - unlike typical monopolies - it didn't steal its booty like a pirate in the night. It didn't win by being closed and proprietary. Google won by being open and distributed - which is not the image of the monopolist.


3. As stated above, the House will pass a revised bailout bill soon, and the market should jump at least 200 points on that day. Short-term volatility will favor companies unfairly beaten down by the financial sector, such as State Street Corp. (STT), which didn't directly invest in subprime, and cash-rich companies, like Google (GOOG).

On a side note, when I bought the Google shares, I placed a market order rather than a limit order, causing the trade to execute at 391 rather than the lowest available price (at the time) of 388. Remember: when trading in volatile markets, place a limit order.

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