Short Sell Google?

[Emperor]

I am thinking of shorting Google for all of the obvious reasons.

With a not so obvious reason that Microsoft's new OS will have a VERY similar product built-in.

My only fear is that there has been a ton of insider selling, and a ton of shorting already, which may have the price DEPRESSED??????

Any comments, ideas, suggestions??

[lastsamurai]

only if you want the bid to get WACKED.

As long as the stock as strong earnings...great relative strength..there is no reason to short the stock.... if you want to lock in the profits just buy puts.

[Emperor]

[ QUOTE ]
if you want to lock in the profits just buy puts.

[/ QUOTE ]

Umm what profits would those be? This is a $150 stock trading at $300 IMO.

Selling short means I can wait forever for the stock to fall.

Buying puts means I have to be able to anticipate how soon and how fast it will drop, and I have no idea.

Please explain the advantage. I'd also like to know why buying puts in this situation is better than selling calls.

[TStoneMBD]

harry s dent, a theorist that appears to be respected on this forum says that we will go through a second tech boom in the next few years. leading technology companies such as google, according to him, will continue to rise tremendously as they capitalize on the surging tech boom.

i dont know much about the current market, nor do i know if harry s dent is just a lunatic, but i thought i would provide this food for thought.

[lastsamurai]

if you own the stock already you buy puts to protect your profits..... selling COVERED calls is the safest option strategy out there... This is the only option strategy they let you use in IRAs I guess the difference between buying puts and selling calls is how much of a gamble you have

[buffett]

[ QUOTE ]
Selling short means I can wait forever for the stock to fall.

[/ QUOTE ]
Yeah, good luck with that, especially when your broker issues a margin call.
-web

[Uglyowl]

[ QUOTE ]

Umm what profits would those be? This is a $150 stock trading at $300 IMO.

[/ QUOTE ]

GOOG has real profits and the street estimate is $7.34 for next year. If you think GOOG is worth a P/E of 20 you are smoking crack.

You're smoking crack if you think ANY stock is EVER worth more than a P/E of 20. I have trouble buying stocks with P/E's over 15. If it works for the greatest investor of all time, why not me?

I think this is, however, a bad buy. The stock is going to stay ridiculously overpriced for a while to come, I suspect.

[buffett]

[ QUOTE ]
I have trouble buying stocks with P/E's over 15. If it works for the greatest investor of all time, why not me?

[/ QUOTE ]
I'm assuming you're referring here to Warren Buffett. Do you know the P/E of KO when he bought it in the late 1980s? What about the implied P/E he would have paid if the KO puts he sold in 1993 would have been exercised? Hint: both are way more than 20.
-web

[Sniper]

[ QUOTE ]
Please explain the advantage. I'd also like to know why buying puts in this situation is better than selling calls.

[/ QUOTE ]

Well considering that based on your OP you don't own any GOOG stock...

If you are wrong and GOOG keeps going up, with buying puts you've lost a litttle bit of money, while your sold calls will cost you alot of money.

If you are right and GOOG drops like a rock, your bought puts will make you tons of money, while your sold calls will make you a small amount of money.

So bottom line (when naked, you dont own the stock)...
Buy Puts = Low Risk, High Reward.
Sell Calls = High Risk, Low Reward.

I wouldn't recommend either strategy with GOOG at this point.