Tuesday, November 29, 2005



For Google to take a thump on the head is not a big deal after such a fantastic run. The bigger implication is that the pull back has started.

Yes, the Dow was up today, so what? Big money often flows into the Dow at the start of a correction. The bond market also took a good thumping today; another sign that there may be a stock market correction in the cards.

The market is no doubt over-bought after a nice long rally. However, the sentiment numbers are not out the roof. Therefore, I do not expect a big down-draft. The exception could be in gold and other mining stocks. Even the oils may get hit a little harder than the average stock. It is hard to guess when the gold correction will begin. There could be one more strong blow-off rally or the prices could drop from here.

If you own Google at lower prices and are the type that will panic if it breaks prior support areas, then you might want to lighten up now with plans to buy back later. Don't complain to me if you never get the chance to buy back. There are any number of positive events that could take the stock back up strong. One of the exciting areas is the possibility of ala cart TV channels. It is clear that internet video is going to grow by leaps and bounds. It makes sense to allow Google to catalogue content. Google has made a number of recent moves to negotiate content deals.

Google was thumped today but the long term prospects are excellent. It is a high priced stock by most any measure but it has the potential to grow like few other companies. For me and my house, we will ride the bucking bronco. We will hold on tight. There may be a rough week or two ahead but 2006 should be another great year for Google.