Avoid the Panic! Buy when The Streets are Bloody!
Richard is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
Google's (NASDAQ: GOOG) shares made a recent peak in after hours at just under $660 a share upon announcing earnings that beat expectations. However, they also announced a stock split of common shares that investors got in a huff about because some "experts" told them that their voting power was being diluted, which is simply farcical, both practically and in theory.
Video: The Google share split explained
Practically because investors have the same ratio of voting power as before as everyone's shares are being split, as well as theoretically, because Google is run as a dictatorship, which the founders stated from the outset would be the case. So even if every single other Google shareholder came bearing arms at the annual meeting, it would be fruitless.
Meanwhile, I'm reading message boards, articles in the NY Times, comments directed towards my own pro-Google propaganda (yeah, I'm part of the machine) and investors are getting their fears riled up by the "evil hoopla," subsequently selling off their shares, as the stock plummeted nearly 8% over two days.
My reaction as a long time Google shareholder. GOOD!
Yeah, that's right, I'm cheering for the stock to go down. Go down already.
Video: Avoid the Herd Mentality! Really, bubble up, bubble down!
Huh? Confused? I'm not. If people keep selling because the experts decry this move, when absolutely nothing has really changed, then I get the same stock, at a lower price. Fantastic, I'll gobble it up. If it magically gets down to $550, I might just go all in, cause in my estimation, in a couple years with the network of products Big G has coming, I think it'll be $1,000 a share.
So go ahead people, listen to the experts, listen to some Crameresque figure rant and rave over the fact that Google's evil, and doesn't give a lick about it's shareholders. I'll wait for my price while y'all panic.
If you want to wait to til the waters calm, when everyone is jumping around like a group of dentist patients on laughing gas, singing in harmony how the stock is a can't miss (think Yahoo at the height of the internet bubble or present day Apple, then go ahead, that's probably when I'll think about selling. You'll pay a high price for a rosy consensus.
Or like Barron Rothschild said long ago, "When there's blood in street, start buying," I'm hoping for a little more of the river of red, I just don't want the blood to be yours.
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