Stupidly Overpriced Stocks
I've got a couple of stocks in my portolio that I
like, and that have been doing really well, but are stupidly
overpriced.
First is Google (GOOG). I
told everybody I thought it was stupidly overpriced when I bought it in February
at $382. Exactly the kind of stock I normally avoid. Now it's at about $510.
Google is absolutely wallowing in cash flow. The question is whether they can
find a good place to put all that cash. They're smart folks and all, but I
can't help but think they've got a lot further to potentially fall than to
climb.
Second is International Assets
(IAAC). I bought this Asian commodities stock in May of 2005 at a small premium
because I believed that people were going to start transferring huge sums into
Asia, and they'd profit. Back in August they rocketed to $19, and I sold off a
portion of my holding without even looking at their financials, because such
rapid growth defied rationality. Then I looked at their growth and became
tempted to buy even more. In fact, I put a buy order in at $18.50 -- that would
have justified my hair-trigger sell. Alas, it never got that low again. I said
I'd sell more if it reached 30. Today it's at $36, and is my single largest
holding. The growth is shocking, though: Annual revenues for 2005 were $26
million dollars.
Quarterly
revenues from last quarter were $46 million dollars. And still nobody is
following this stock, and I think there's considerable room for
growth.
Remember how I kept selling
CEDC as it went up? I'm going to not do that with IAAC. Let's see what
happens.
I'll revisit my decision when
(and if) it reaches the 50s. (Perhaps January, at current growth
rates.)
Filed Wed - November 22, 2006, 08:18 AM in
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