Invest in Google shares? A fine long term bet?

[advancebooking]

I'm thinking of parking $20k to $50k in Google shares or a fund that is exposed to Google (for a 5 year term) and seek your opinion.

Googles share price is around $1,138 and the question is does it still have a long way to go. Could Google have a market capitalisation of more than US 1 Trillion by 2020 (currently its 340 billion).

From what I have read in various sources, the companies growth will come from consumers shifting to online media- which is clearly what Google dominates.

We all know that Google does not really have a competitor. Is another competitor at all possible in the short term?

As opposed to buying Google shares using my International account at CBA commsec account, I realise that I could alternatively invest in a Fund that invests in Google and other technology stocks. The one that I found whose head office is in melbourne and the return has been 12% for the last 10 years or so. The only issue with the fund that I dont agree with is that this fund has exposure to the UK housing market- they predict gains in this sector in 5 to 10 years and Im not sure I agree with this.

Both options have their own risk. What is your opinion on any of the above???

many thanks

[advancebooking]

I forgot to say that the fund mentioned above charges an MER of 1.54% + 20% perf fee.- essentially there are no entry or exit fees and thus can access my money anytime. Its exact weighting in Google shares is 6.9% and it invests long/short in global equity markets and has the ability to invest in cash to protect capital – it also has a dynamic hedging strategy.

Edited February 5, 2014 by advancebooking

[bartender100]

Can't advise on their share price, but in my opinion Google will just grow and grow, they are branching out in many fields of technology, including advanced robotics

[AyG]

It's impossible for anyone to give a reasoned opinion if they don't know what percentage of your total investments will be in Google. $20k to $50k sounds like quite a lot of money for someone who isn't already wealthy. And if already wealthy, seeking advice on a webboard possibly isn't the best way to go.

[belg]

did you not hear the news thad ad money for google is going down? 1138 dollars for just one share? wow... wait till the bubble bursts again...

[how241]

did you not hear the news thad ad money for google is going down? 1138 dollars for just one share? wow... wait till the bubble bursts again...

+1....very high price now, lots of risk to enter at these prices.

[brianP]

Someone warned me about eBay and the bubble burst, 10 years ago.

[AyG]

did you not hear the news thad ad money for google is going down? 1138 dollars for just one share? wow... wait till the bubble bursts again...

The price of a share is absolutely irrelevant. They could do a 100 for 1 split, taking the share price down to 11.38. That wouldn't make the share a significantly better or worse deal.

The Berkshire Hathaway A share price is currently $164,817. That price isn't putting off a certain type of investor.

[humqdpf]

There is a world of difference between taking a 5 year punt on one company and having a well-thought through portfolio.

Assuming that you are not prepared to just lose that money, a fund is probably the best way to go. I have no idea about your attitude to risk but the fund you suggest appears to be somewhere around medium to higher risk because of its exposure to tech stock etc.

If you are prepared to take a punt, I would suggest that you have probably already missed the bus in relation to Google. Yes, Google has been very successful and has grown in share price immensely. Yes, Google can get bigger. But remember, as a conglomerate gets bigger, it takes on more risk and bigger does not necessarily mean more profit. You hear a lot about the stuff that works in Google but you don't hear so much about the stuff that did not work. As companies like Google expand, they eventually run out of industry within their chosen sector and have to look elsewhere outside their comfort zone. And often that is where the problems start.

This is not to say that the shares will not grow - there is always the chance that something completely unpredictable can jump out at us and create a whole new way of doing things online etc. But I would not bet my stash on it.

Property in the SE of England will probably continue to do well, simply because a) it is not easy to build new properties in SE England what with the planning laws and the fact that they might have to knock down a few older buildings to make way for a taller building and the UK is coming out of recession and in fact the SE of England probably has its own economy that can be booming while the rest of the country is in recession. That is not to say that a bubble is not starting to develop but it could take another few years for it to grow and then burst. Lack of supply and sustained high demand is what creates high property prices in central London and the SE.

[ExpatJ]

I forgot to say that the fund mentioned above charges an MER of 1.54% + 20% perf fee.- essentially there are no entry or exit fees and thus can access my money anytime. Its exact weighting in Google shares is 6.9% and it invests long/short in global equity markets and has the ability to invest in cash to protect capital – it also has a dynamic hedging strategy.

20% performance fee is crazy. Stay well away. Even an annual 1.5 % fee is too high given u can get ETFs average .7 or less

Sent from my iPhone using ThaiVisa app

[slipperylobster]

i bought google and apple...but could not stay in for the long term. Also did not have alot of capital to invest, so I did a monthly payment. Everything I did just helped me break even after a year. Over 5 years, I would suppose, it would be a good investment. But those peaks and valleys on the chart can hurt you bad, if you pull out at the wrong time. Seems like tech stocks (in general) follow suit.

If I had 100 grand in usd that I would not need for five years, I would definitely buy.

Realizing any bad news..almost anywhere in the world, dealing with oil, war or money issues causes people to pull out quickly and buy gold. Can fall overnight.... i did not have the stomach.... too many variables that nobody can control.

[martijn12345]

If anybody had any idea... They would probably not be reading here right now but trading. But honestly, nobody knows. Yes Google is branching out and seem to be set for a bright future, but that is already priced in. Here's my advise.

If you got 20-50k to invest. Not put it in 1 stock, but build a portfolio with say about 10 stocks, and then Google could certainly be one of them. Pick the best of the best in every sector. So google could be your Tech pick, pick a big oil company, pick a good consumers staples company, pick a solid bank, pick a big pharmaceutical company. And spread your money and your risk.

If you are too lazy to do this research, as mentioned already; Berkshire Hathaway, the investment company of legendary Warren Buffet, would be 1 stock to buy. He is fairly diversely invested, has a superb track record, and if you just buy shares in his company he will not charge you any fee, for essentially doing the same as an investment company would do.

You say your horizon is 5 years. What do you expect as a return. Cause the higher the possible return, the higher the risk normally. If you are okay with say 5-10% return without much risk. Invest in a blue-chip (big company) that offers 5% dividend, those share hardly move at all. But the 5% is guaranteed, and if the stock does climb a few % a year, that's a pretty safe and solid return. If you expect to triple your money over 5 years....That would be a serious challenge and not without risk.

Edited February 5, 2014 by martijn12345

[Muhendis]

Look at the classification of "google" shares. If it is a commodity then look at its potential for growth and yield. If it is an entertainment organisation then look at its advertising revenue and other sources of income. When you have a good feel for these factors then you must decide for yourself if it is worth risking your money. The more pressing question you should be asking yourself is; "What would be the effect on my life if I were to lose my investment capital?"

[AyG]

If you are too lazy to do this research, as mentioned already; Berkshire Hathaway, the investment company of legendary Warren Buffet, would be 1 stock to buy.

Yet Berkshire Hathaway has underperformed the S&P 500 over the last 5 years. (I believe the underperformance is for much longer than this, but can't be bothered to dig out the statistics.)

[Suradit69]

You should watch some Fast Money shows on CNBC... this time of the year they come on at 11:00 in the morning in Thailand. They're always going on and on about GOOG and YHOO, Baidu, etc . I usually tune out because stocks like that are too volatile & speculative for my tastes ... although I do have some DDD (3-D printing) which is all the volatility I need. I know today they were talking about this headline:

Google Gives $100 Million Award to Outgoing CEO

Nice work if you can get it.

If you look through here, you might find another clip or two where they talk about GOOG ... just for some other input to consider http://video.cnbc.com/gallery/?video=3000242610

S&P has a hold on the stock with a $1300 target. Mornngstar gives it a 2 star rating out of 5.

ä 01/31/14 11:38 am ET ... S&P CAPITAL IQ REITERATES

HOLD OPINION ON SHARES OF

GOOGLE (GOOG 1175.8***):We are raising our

12-month target price to $1,300 from $1,050, on

revised DCF analysis.We are trimming our EPS

estimates for '14 to $40.74 from $42.46 and '15's

to $46.12 from $47.18.We calculate that including

the impact of stock-based compensation

GOOG posts Q4 EPS of $10.09, vs. $8.68, below

our forecast of $10.64, reflecting Motorola results

that were worse than we projected. Our

forecasts include Motorola despite GOOG's announced

plans for a pending sale. GOOG's

board also approved a long-awaited 2-for-1

stock split it expects to be executed in about

two months. /S. Kessler

Edited February 5, 2014 by Suradit69

[Suradit69]

You should watch some Fast Money shows on CNBC... this time of the year they come on at 11:00 in the morning in Thailand. They're always going on and on about GOOG and YHOO, Baidu, etc . I usually tune out because stocks like that are too volatile & speculative for my tastes ... although I do have some DDD (3-D printing) which is all the volatility I need. I know today they were talking about this headline:

Google Gives $100 Million Award to Outgoing CEO

Nice work if you can get it.

If you look through here, you might find another clip or two where they talk about GOOG ... just for some other input to consider http://video.cnbc.com/gallery/?video=3000242610

S&P has a hold on the stock with a $1300 target. Mornngstar gives it a 2 star rating out of 5.

ä 01/31/14 11:38 am ET ... S&P CAPITAL IQ REITERATES

HOLD OPINION ON SHARES OF

GOOGLE (GOOG 1175.8***):We are raising our

12-month target price to $1,300 from $1,050, on

revised DCF analysis.We are trimming our EPS

estimates for '14 to $40.74 from $42.46 and '15's

to $46.12 from $47.18.We calculate that including

the impact of stock-based compensation

GOOG posts Q4 EPS of $10.09, vs. $8.68, below

our forecast of $10.64, reflecting Motorola results

that were worse than we projected. Our

forecasts include Motorola despite GOOG's announced

plans for a pending sale. GOOG's

board also approved a long-awaited 2-for-1

stock split it expects to be executed in about

two months. /S. Kessler

I do have some DDD (3-D printing) which is all the volatility I

How's that for timing. I mention my DDD holding and minutes later it opens down about $20 a share.

[shaurene]

I am in the same boat, Google is good no doubt about it, end last week Facebook announced it was moving into similar things also Google and their shares went up quite a few dollars. Look at some oil drillers stocks in West Texas, they have discovered oil and gas deposits their bigger than 4-5 OPEC countries put together. They have all the technology now to get this out through the Fracking they believe the US will overtake Saudi for biggest oil/gas exporter within 10 years.

Good long term bet is Apple also.

Go on to Google and punch in Motley Fool it is a very good site for stock advise and good to join for a very small fee to get the very latest info etc.

[shaurene]

You should watch some Fast Money shows on CNBC... this time of the year they come on at 11:00 in the morning in Thailand. They're always going on and on about GOOG and YHOO, Baidu, etc . I usually tune out because stocks like that are too volatile & speculative for my tastes ... although I do have some DDD (3-D printing) which is all the volatility I need. I know today they were talking about this headline:

Google Gives $100 Million Award to Outgoing CEO

Nice work if you can get it.

If you look through here, you might find another clip or two where they talk about GOOG ... just for some other input to consider http://video.cnbc.com/gallery/?video=3000242610

S&P has a hold on the stock with a $1300 target. Mornngstar gives it a 2 star rating out of 5.

ä 01/31/14 11:38 am ET ... S&P CAPITAL IQ REITERATES

HOLD OPINION ON SHARES OF

GOOGLE (GOOG 1175.8***):We are raising our

12-month target price to $1,300 from $1,050, on

revised DCF analysis.We are trimming our EPS

estimates for '14 to $40.74 from $42.46 and '15's

to $46.12 from $47.18.We calculate that including

the impact of stock-based compensation

GOOG posts Q4 EPS of $10.09, vs. $8.68, below

our forecast of $10.64, reflecting Motorola results

that were worse than we projected. Our

forecasts include Motorola despite GOOG's announced

plans for a pending sale. GOOG's

board also approved a long-awaited 2-for-1

stock split it expects to be executed in about

two months. /S. Kessler

I do have some DDD (3-D printing) which is all the volatility I

How's that for timing. I mention my DDD holding and minutes later it opens down about $20 a share.

Wow DDD is one of my favourites

[SheungWan]

If you want to go 5 year long on an individual stock then what is stopping you from directly buying the stock yourself rather than through a fund?

[ozyjon]

About Google,, i remember the day i started using Google after reading an article about it, it was the day the twin towers came down, 9/11 as the term goes, that was a long time ago and they have done well but in saying that for me Google is a bit on the nose,, read up all you want and make up your own mind,, just like Facebook, really on the nose, take your time and look at the new players and see why you should take notice,, for instance,, look up TOR browser.

Do yourself a favor and read up on it otherwise just keep using Internet Explorer and Outlook and be happy. New players threatening the old ones all the time.

[Berkshire]

OP, do you spend a lot of time on stock message boards? That might be a bit more insightful as the folks on there (minus the paid bashers/pumpers) are usually serious about that particular stock. By the way, there's a difference between a great company and a great investment. Google at this level...who knows. It'd be great to find a company who was "like" a Google in the very early stages. Imagine buying Google when it IPOd at $85.

[Senechal]

I'm short Google.

At the end of the day, Google is entirely dependent on ad revenues. They have multiple other revenue streams but all of them pale before Search -- which is declining in profitability.

Google's other areas are promising -- particularly Docs at the enterprise level. But the revenue just isn't there, and even the best case projections don't put it at the level of Search revenue.

On top of that, Google is increasingly subject to government intervention -- see today's European ruling on Search competitiveness.

Google is an *awesome* company. But I don't see growth in the near to medium term. My two cents.

[Asiantravel]

About Google,, i remember the day i started using Google after reading an article about it, it was the day the twin towers came down, 9/11 as the term goes, that was a long time ago and they have done well but in saying that for me Google is a bit on the nose,, read up all you want and make up your own mind,, just like Facebook, really on the nose, take your time and look at the new players and see why you should take notice,, for instance,, look up TOR browser.

Do yourself a favor and read up on it otherwise just keep using Internet Explorer and Outlook and be happy. New players threatening the old ones all the time.

as well as Duck Duck Go

We believe in better search and real privacy at the same time.

https://duckduckgo.com/

Edited February 6, 2014 by Asiantravel

[SheungWan]

About Google,, i remember the day i started using Google after reading an article about it, it was the day the twin towers came down, 9/11 as the term goes, that was a long time ago and they have done well but in saying that for me Google is a bit on the nose,, read up all you want and make up your own mind,, just like Facebook, really on the nose, take your time and look at the new players and see why you should take notice,, for instance,, look up TOR browser.

Do yourself a favor and read up on it otherwise just keep using Internet Explorer and Outlook and be happy. New players threatening the old ones all the time.

The Google story is less about the browser and more about the search engine.

[JesseFrank]

Why not invest in Amazon, it's share price reaches new highs all the time, however the company has NEVER made a profit yet.

[SheungWan]

Why not invest in Amazon, it's share price reaches new highs all the time, however the company has NEVER made a profit yet.

Because the Amazon story is not about the bottom-line. It is a story about top-line growth and market share and growth for the future. An amazing story which has shaken up the retail trade.

[JesseFrank]

Why not invest in Amazon, it's share price reaches new highs all the time, however the company has NEVER made a profit yet.

Because the Amazon story is not about the bottom-line. It is a story about top-line growth and market share and growth for the future. An amazing story which has shaken up the retail trade.

With a share price at 587 times price to earnings, they will need a lot of growth.

[SheungWan]

Why not invest in Amazon, it's share price reaches new highs all the time, however the company has NEVER made a profit yet.

Because the Amazon story is not about the bottom-line. It is a story about top-line growth and market share and growth for the future. An amazing story which has shaken up the retail trade.

With a share price at 587 times price to earnings, they will need a lot of growth.

Indeed they will. Millions of people (including me) use them as a first port of call when buying stuff.

Retail store stocks are the ones increasingly under pressure in 2014, so a successful 2013 may not be enough.

Another rocket growth stock has been Netflix.

[JesseFrank]

Why not invest in Amazon, it's share price reaches new highs all the time, however the company has NEVER made a profit yet.

Because the Amazon story is not about the bottom-line. It is a story about top-line growth and market share and growth for the future. An amazing story which has shaken up the retail trade.

With a share price at 587 times price to earnings, they will need a lot of growth.

Indeed they will. Millions of people (including me) use them as a first port of call when buying stuff.

Retail store stocks are the ones increasingly under pressure in 2014, so a successful 2013 may not be enough.

Another rocket growth stock has been Netflix.

Millions of people, including you, use them

Why ? Because they are cheap

Why they don't make a profit regardless of the fact they do a roaring trade ? Because they are cheap ( read they sell below their cost price )

How will they turn themselves into a profitable company ? By not selling below their cost price

End result ........ Millions of people, including you, will stop using them.

[SheungWan]

Millions of people, including you, use them

Why ? Because they are cheap

Why they don't make a profit regardless of the fact they do a roaring trade ? Because they are cheap ( read they sell below their cost price )

How will they turn themselves into a profitable company ? By not selling below their cost price

End result ........ Millions of people, including you, will stop using them.

There is evidence that they are systematically selling below their cost price? And does that also apply to the myriad of traders who use the Amazon platform? Their margins may be low which is not the same thing and capture of market share offsets that looking forwards. You may not buy into the Amazon story through 2014 so you are perfectly entitled to short the stock (many do). However your original point was that they were a bogus stock because they didn't make a profit and we have now disproved that assertion. The bigger picture may be that you are really on a mission to join the conspiracy club team because you have difficulty following stock price movements and are looking for targets to lash out at.

Edited February 6, 2014 by SheungWan