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Google (GOOG) Dilemma

My background is in the tech sector and for a number of years I have been looking at Google and kicking myself for not having purchased any stock when it first came on the market. I strongly believe that Google is here to stay and that they offer the best search engine product available today.

Unbelievably Google is also great at marketing. Their Adsense and Adwords campaigns are also top notch in the industry. I noticed a few years ago when Google had a server crash in North America, that every website I wanted to visit was also offline because these sites were using some form of Google product on the back end. This was amazing to me. Now let the kicking start.

For the last few years I have been watching this stock increase at an extreme rate and each time I lament that I didn’t buy in. The last time (Right around the afore mentioned server crash), the stock was at $859.62 each and I mentioned to a friend of mine who had some money to invest that I thought this was a “no brainer” investment. The main reason I thought that Google was a great investment was because of the server crash. When that happened and nearly ever website in North America went down, and I suddenly understood just how successful and pervasive Google is as an entity on the internet.  You would think I would take my own advise, but I didn’t.

My friend and I each had about 10,000 to invest at the time. I agonized over the decision, but my portfolio was not very well rounded yet. I determined it would be best to deepen my range of investments by buying stocks in various different sectors to help insulate the portfolio from down trends in sectors. Basically I didn’t want to put all my eggs into one stock.

Here are the results for those who are interested. As of January 8th 2014.

  • Northrop Gummand (NOC) 20 shares. Cost $1891.00. Current $2295.20. Increase $404.20. Percentage 21.37%
  • Pepsi Co (PEP) 20 shares. Cost $1581.60. Current $1669.00. Increase $87.40. Percentage 5.53%
  • Proctor & Gamble (PG) 20 shares. Cost $1557.20. Current $1604.00. Increase $46.80. Percentage 3.01%
  • Wal-Mart Stores (WMT) 20 shares. Cost $1457.80. Current $1559.20. Increase $101.40. Percentage 6.96%
  • Walt Disney Company (DIS) 20 shares. Cost $1218.00. Current $1514.00. Increase $296.00. Percentage 24.30%
  • Marathon Oil Company(MRO) 25 shares. Cost $859.25. Current $866.50. Increase $7.25. Percentage .84%
  • Unilever N.V. (UN) 20 shares. Cost $762.60. Current $781.00. Increase $18.40. Percentage.84%
  • Unilever plc (UL) 20 shares. Cost $773.60. Current $796.60. Increase $23.00. Percentage2.97%

Total Share Cost of $10,101.05 Total Share Increase of $984.45 Total Dividend Earned $92.44

Total Portfolio Increase $1076.89

Dividends Broken Down for those interested

 PEP $12.06 WMT $9.99 NOC $12.93 UL $7.78 UN $7.80 MRO $5.05 PG $12.59 PEP $11.68 NOC $12.56

I invested $10,101.05 with a return of 1076.89 (9.38%) in just over 4 months. I am pretty pleased with a 9.38% increase but, I wonder how I preformed verses Google over the same time period.

If I had invested in Google (GOOG) the stock value on August 27th (Same date as other investments) was $859.62.

I could have purchased 11 Google Stocks for a total of $9455.82 and still had 650 to invest somewhere else.

Current price on Google (GOOG) is $1139.97 for a total of $12539.67 an increase of $3083.85 (30.62%)

Currently Google does not pay a dividend so there is no help there.

My investment strategy is to be safe but in this case I wonder if I made the right decision. If you look at Google’s financials they are very impressive. They have a tremendous amount of cash on hand, and look like a lock to have another banner year.

Have I missed the opportunity or, does Google have enough growth in it to grow even more?

What do you think?


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