NEW YORK (TheStreet) -- Google (GOOG - Get Report) is hot. Maybe too hot.

After beating estimates on its most recent quarterly earnings, as Insider Monkey writes, Google is now priced at over $750/share, with an earnings multiple of 23.

The company seems to be hitting on all cylinders.
  • People laughed at its cheap Chromebook, but the under-$300 laptop apparently did very well over Christmas, and now Microsoft ( MSFT - Get Report) OEMs like Hewlett-Packard ( HPQ - Get Report) are rushing to suppport it, our Anton Wahlman reported.
  • The Google Plus social network, which people also laughed at, is now the second-leading social network on the planet, behind only Facebook ( FB - Get Report). Forbes notes that number three is Google's YouTube.
  • Google Android remains the leading phone operating system, and with Apple's ( AAPL - Get Report) iOS it now commands 92% of the market, writes ValueWalk. It sounds like the mobile game is over, and Google won.

It's at times like these that my spidey-sense starts tingling. Not everything is good for Google. The tax man cometh, especially in Europe. The anti-trust battle isn't yet over, because the European fat lady has yet to sing. Microsoft Bing is not dead, and Marissa Mayer is doing interesting things at Yahoo! ( YHOO). The cloud may sound nice, but the price war with ( AMZN - Get Report) can't be helpful. Sure, others are getting hurt worse, but margins have to be thinning.

Google, in short, is priced to perfection. Perfection does not exist.

If you look at annual numbers, Google's top line continues to march along smartly, doubling since 2009, but bottom line growth is slowing, mainly due to the Motorola acquisition. And isn't Google still involved in patent litigation over Android, for which it's already paying Microsoft per-phone charges and for which it might have to pay others, like Apple?

These are not huge problems. But Apple didn't seem to have huge problems when it rolled over either. Its price peaked at over $700 a share just as the iPhone 5 was introduced. The company accelerated its product introductions right through its fall, and even announced record results for the December quarter, resulting in a collapse of 10%.

When they decide they don't love you, they don't need a reason. (I'm old enough to remember when people loved Nickelback. Now, as NPR reported in November, it's hip to hate them.) Apple shares are now priced at a multiple a third lower than that of Microsoft, despite its having a cash hoard estimated at $137 billion.

Apple, in other words, is Nickelback. Google is more like Taylor Swift, who sold 1.2 million CDs in one week last fall, as noted. Tastes will change, and people will in time be dumping on Ms. Swift, too. CEOs shouldn't listen to the dictates of fashion, but smart investors can take advantage of them.

Markets are not rational. They're created by people. They're based on emotion. Emotions can rise, and emotions can fall. You can either ignore the emotion or take advantage of it, selling when times are flush and buying when times are hard.

I hold shares of both Google and Apple, but I haven't been adding to my Google holdings lately. I've bought more Apple. Because when everyone tells you nothing can go wrong, something always does.

At the time of publication the author had positions in YHOO, AAPL, MSFT and GOOG.

This article was written by an independent contributor, separate from TheStreet's regular news coverage.