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IMO he bought GOOG way too high, at a price where several
years of growths were priced in already.
Now at $475 GOOG is not overvalued anymore, albeit still expensive.
I don't think GOOG is interrsting above $400, say, for a hoping a 20% returns over a few months.
It's overvalued because everybody knows this brand more poeple bought their shares than a machine tool manfacturer for example!
Technicaly speeking GOOG is overvalued at $475 and should be fairly priced around $200, but Google is Google.
Your friend didn't loose his money: GOOG is an excellent company with growing revenues and profit, tons of cash and NO debt.
That means that even if he looses 25~30% now, in a few months or a few years he will recover his loss unless he sells because the company has some solid bases.
Just let's be realistic: GOOG cannot grow the way it grew in the last years. 10~15% growth is, IMO a more cautious forecast.
Note: I'm going to merge this thread to the Stock Arena forum where a thread on GOOG aready exist.
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