Thursday, November 04, 2004

Google: a Value Stock?

I know enough has been written about Google stock, so I will keep this brief. I am not a deep value investor by any stretch of imagination but Bill Miller who runs Legg Mason Value Trust, the only fund to beat the S&P500 for 13 straight years, sure thinks about value. (or you hope)

It's very interesting to read Bill's commentary regarding the funds' performance in 3rd quarter. Even though he admits to being wrong by not owning Energy stocks he doesn't really highlight why he thinks Google deserves to be in a Value fund. He does delve into why the the process of Google's auction-style IPO changes the research requirement for money-managers bidding on a IPO. But it be nice to see how Bill percieves Google to be a value stock. At Sept 30th 2004 GOOG accounted for 1.76% of assets in the fund where as AMZN was the largest Internet related holding at 6.11% of assets. GOOG is up another 42% since end of the quarter. There is increasing short-term pressure on GOOG as the lock-up expires and insiders cash-in their options but perhaps GOOG can help Bill keep his 13 yr streak going. Good luck Bill!


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