Stockcoach's Corner

Down $3,200 today. It looks like my suspicion that yesterday's big rally was nothing more than a short-inspired dead cat bounce turned out to be accurate. However, tomorrow is another day, and who knows what that will bring.

I noticed that Google was up 10 percent after the market closed on better than expected earnings. Ahh.. what can I say? Investors continue to value Google as though there were virtually no chance that their technology will be superseded by that of a rival within our lifetimes.

Once upon a time, investors actually believed that tech stocks deserved a lower P/E precisely because the earnings of tech companies could easily disappear if a better technology came along. Yeah I know, but Google's technology has no rivals, right? Well, as a matter of fact, numerous tests have shown that Google's search queries yield results that are not much better (if at all) compared to Yahoo, MSN, etc.

But more to the point, isn't this the sort of rhetoric that investors once heard about Polaroid, Cray, and Wang in the 70's; Commodore, Atari, and Compaq in the 80's; and Iomega, Netscape, and Altavista in the 90's. And where are these companies now? Perhaps with the exception of Intel, I can't think of a single tech company that has been dominant in three consecutive decades. Why should Google be any different, especially when it's not a natural monopoly like Microsoft or Ebay? As St. Augustine might have said, "Oh Lord let me short Google, but not yet".