Losing on Google

I lost a shitload of money on Google. Yeah, I know- "but they're doing great!" I think I'm too fiscally-conservative for my own good, I guess.

Google was hovering between $180 and $190 when I first started watching it. That was about three or four months ago.

Their IPO, the Initial Public Offering, or the first time a stock becomes available to the public via the stock market, was a huge event, in case you spent a few months in a coma last year. They were a terrific-looking company- a great technology, the leader in their market, with extremely bright young executives and employees. People were crazy about them. Am I was, and still am one of those people, and I grow more fond of the company every day.

The IPO was as anything Google, a revolution. They invented a whole new way of doing IPO's, scaring and exciting everyone. Morgan Stanley recently had an event here at Rutgers, where they explained that they had to develop brand new software to handle the Google IPO.

It was very successful and the stock price ended up being set at just above $100, after being set at $85. But jumping $15 on the first day isn't a good indicator of what the stock would do later. I was interested at starting investing in the market a few months before then, and expected the IPO to be overhyped, so I didn't go in. I expected the share price to be extremely inflated, and that it would drop by about 20 percent, as people realized the same thing.

In the six months following that silly notion, the price doubled, and I was oblivious of that fact.

So when I started watching the GOOG symbol on finance.yahoo.com, I felt a little stupid, thinking I could have put a few hundred dollars into it, and been up by a like amount.

I've been watching another thing since watching the stock. The technology. Since the IPO, Google has been releasing beta after beta of revolutionary new technologies, at a pace that would shame DARPA: Gmail, Google Maps, Google Local, Google Suggest, Google Mobile.

In addition, they've also started selling Google-search servers for companies to use on their own sites, starting at $3000 on hardware I expect they're able to buy or manufacture for less than $1500.

So you can see why I've been telling everyone that Google is going to stay a powerful company, and eventually a market-mover. But I still didn't have any idea of the price, even after climbing steadily for six months was at its actual value, rather than an unreasonable expectation.

So I watched. And watched. And watched. It continued it increases, slowly, but the whole market was moving slowly. The economy seems to be doing poorly, what with the war still going on, terrible legislation being passed by congress, and only hopeful optimism for peace in the middle east. And now China and Japan are having a little trouble.

And then, on Friday, April 15th, IBM nose-dived. And the market went right after it. And Google's price followed them, not for any good reason, but because the floor of the exchange seems to me to be occupied by sheep. Because of two bad earnings reports, the entire market jumped back something like 5 months.

Google's price dropped from near $192 to $185. And I told myself: it's going to recover within a month. But had the market's slide come to a stop? Could I buy Google even lower, and make more? I guess that was greed on my part.

So I wait until the next day's trading starts, and Google is up. And the next day it was up again. And within four days of trading not only was Google back up, but it was $10 higher than it was before the drop- to $210!

I had lost. I had lacked experience, and understanding of just how crazy investing in the market is. If I had gone in at $185, for about 5 shares, I'd have made over $100, in a week. But here's the problem- I could lose just as much, any even much more. Trading actively would be a waste of time, since I could make much more by being a productive member of society. Don't get me wrong- I'm still going into the market. But I'm looking for a long-term investment. And maybe I'll bet a little on Google.

And now I'm faced again with the same problem: a new scenario, which I have no idea how the market would likely react to. Or, perhaps I should just extrapolate from my current data a new theory. The theory is this: "Google is as Google does". Which means very little, when you're trying to predict the unpredictable.