Taking Profits on Google/Alphabet – GOOG

We bought Google/Alphabet on “Bucket Monday” at $578/share when we bought ten stocks on the 1000 point down day. While I still love the company, I don’t love it as much as the stock market has the past two days. The company announced what amounted to a 1% buyback of their shares and the stock price is up over 15% on trend followers piling in. I’m not one to chase gains and while I’m in no way negative on the company, I do think that the company is suddenly fairly to slightly overvalued in the short-term.

Google is in the early phases of a transition towards mobile where ad revenue is lower per click, but potentially there are more clicks. That bears watching. I do like NEST, the vast array of IOT programs and I think Alphabet could even get into solar energy at some point via strategic acquisitions. The company’s cash hoard is powerful, the earnings are good but not great compared to its price to earnings ratio and I don’t doubt the company’s technology chops, but, I want to take my 20%+ two month gain. 

For those who keep a core position and a trading position, I think selling your gains and half of your initial position is a good move. It’s what I’m actually doing. I will be looking to re-enter Google/Alphabet (GOOG) at a lower price. For the sake of investment letter record keeping however…

Sell Google/Alphabet (GOOG)