This column was originally published on RealMoney on Nov. 21 at 12:54 p.m. EST. It's being republished as a bonus for TheStreet.com readers. For more information about subscribing to RealMoney, please click here.
When will people understand that it is, in the end, the P/E -- the price of the stock divided by the earnings -- that controls? I have been inundated with questions about where Google (GOOG) can go, as if it's a plane that is breaking the sound barrier and people want to know if it can possibly get to Mach 5. You have to figure out what Google is worth based on what it will earn and what people will pay for it. I don't understand why Google doesn't command the highest multiple in the market, something like 55 times, but the absurdity of saying $825 to those who don't understand this kind of analysis causes immense problems. People think you get it out of thin air. Google is going higher. It is going higher now. Because getting to $600 -- where it is valued at only 40 times earnings -- seems, alas, not that hard. When it gets there, I will leave it to those who like to clock the velocity of planes.>To order reprints of this article, click here: ReprintsTheStreet Premium Services For Personal Service: 877-471-2967
Jim Cramer's Action Alerts PLUS:
Trade right alongside a Wall Street pro — enjoy access to his Charitable Trust portfolio and be sent trade alerts BEFORE he makes a move. Learn More
ETF Profits:
Get money-making ideas from the hottest investment vehicle on the planet. Our experts show you how to play various ETF sectors to help pump-up your portfolio. Learn More
OptionsProfits:
Get 50+ trade ideas a week from the industry's top options experts. Plus — exclusive commentary on market trends and essential trading tools. Learn More
Real Money:
Our team of professional Wall Street Pros — including Jim Cramer, Doug Kass, and Nicholas Vardy — delivers intelligent analysis, timely trade ideas, and colorful commentary. Learn More
Stocks Under $10:
Break into the market with small- and mid-cap stocks... all $10 or less! David Peltier tells you exactly which low-priced stocks he's buying and selling. Learn MoreTo begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
blog comments powered by Disqus
| Dow Jones | S&P 500 | NASDAQ | 10-Year Note | |
|---|---|---|---|---|
| 12,801.23 | 1,342.64 | 2,903.88 | 19.69 |
Oil *
117.67
|
|
DOWN
89.23 |
DOWN
9.31 |
DOWN
23.35 |
DOWN
0.78 |
10 Yr
1.97%
SPDR Gold
167.14
|
|
-0.69%
|
-0.69%
|
-0.80%
|
-3.81%
|
Data delayed 20 minutes |
Connect with TheStreet