Sunday, January 22, 2006

Google this!

Wall street is always a strange place. There is a company that tried to protect the customers' information. Logical common sense is that customers like the company's action and give it more business.

But, what wall street thinks of this? They think that it's really bad for the company! Go figure...

Everybody talks about Google's "battle" with DOJ. Wall street is known for extreme sentiments. If Google announces good earnings, they will push the stock $40 higher; if DOJ files a suit then traders will send Google down by $40. There is no rational behavior.

I always expected something like this would happen to Google sooner or later. But, I didn't think it could be due to DOJ, I thought their not-so-good earnings report will do that.

Ok...what do I do now? Don't initiate any positions, long or short, in Google until Jan 31st. Google announce earnings on that day. If they explode beyond all the expectations, watch for double digit moves like the ones last week but in the other direction.

I can't stop thinking about what happened to MSFT vs DOJ few years ago. Tech market started to slide down after MSFT's anti-trust problems. It took so many years for tech market to recover. Now, Google is having problems. I just hope that history doesn't repeat.

Well...if the history repeats, there are always other sectors like Oil, Gold, etc.,