A New Search Engine: Cooler than Cuil

For some reason that I could not comprehend, a new search engine called Cuil (pronounced cool) debuted within the past week to much fanfare. TV and internet news outlets, including MarketWatch.com, picked up on this non-event.

In my experience, the search engine returned limited, irrelevant results.

However, I stumbled upon another search engine called Scour that I actually like. Scour, like other search websites, compiles results from the Big Three - Google, Yahoo, and MSN - and attempts to combine the results with internal metrics and package them relevantly. Scour combines the engine rankings along with user votes and comments to arrange results in a certain order.

Best of all, Scour pays users (albeit peanuts) to search, comment, and vote. One search results in one point, while commenting or voting can increase the total per search to four points; after 6,500 points, they'll send a $25 Visa. They do provide toolbar plugins for Firefox and IE, so it's easy to earn points without altering your usual routine. To me, the allure of Scour isn't making money, it's getting good search results (and being able to creep my websites' rankings all in one place) while diverting some revenue away from Google into a smaller company's pockets.

At least the people at Scour were able to pick a decent name. Really, Cuil?

Google: Bad for Me, Good for Them

I'm an entrepreneur at heart, and I like when my little business ventures and investing happen to coincide. Running a business using products by eBay, Amazon, and Google allow me to have some additional insight into the actual usage and application of their tools.

I defended and then berated eBay, who has, through their own actions, distanced, scattered, or simply banned a growing number of important sellers.

I have written good things about Amazon.com multiple times - their Fulfillment by Amazon service allows small, medium, and large merchants to enjoy Amazon's world-class supply chain at a (somewhat) reasonable cost.

Now it's Google's term to get an in-depth, er, superficial analysis based on my experiences with Google's tools.

I've been using Gmail since before it was cool, run Adsense on multiple sites, use Firefox with a Google toolbar, post on Blogspot (which is owned by Google), have used G's free "analytics" service before, have watched way too many YouTube videos, have listed items on Google Base (a sort of online marketplace that they have been trying to promote), have accepted and paid through Google Checkout, and lastly, have advertised using Google Adwords. I'll be dwelling on the last service.

Google Adwords is the half of their advertising enterprises that serves merchants. By now, most heavy internet users probably are somewhat familar with Adwords. (If you didn't know, it's those advertisement boxes containing links strewn all over this, and other, websites). Adwords is used by everyone from lowly cottage-industry merchants like myself to Fortune 500 companies - everyone seems drawn by the promise of ten-cent clicks leading to unfathomable sales.

In my experiences thus far, I haven't been able to discern that Adwords is very effective, at least for my business (Whacks Wax). I earned allotments of Adwords credits as I've signed up and renewed hosting contracts over the past five years, and I'd use them as they trickled in. Clicks on keywords that aren't too sought after, like "hot ski wax," are pretty inexpensive, so I set up some programs and let them run.

Maybe it was a result of my lackluster website or undesirable product, but very few clicks ever resulted in sales. It wasn't until I spiffied up my metatags and did some other SEO tricks, earning my website a spot on the first page of Yahoo and Google searches for many keywords, that sales came flowing in. The organic traffic was much, much more effective than the purchased hits.

I just set up CanadasCoffee.com as a means of distributing Tim Horton's, the world's most delicious (but hard to find) coffee. Once again, I have $50 of Adwords credits to play around with; I hoped some free advertising could jump-start sales.

However, the impact of my advertising buck has been wittled away as Google's algorithms keep making my clicks more expensive. The first day, all search terms (from "Tim Horton's" to the more obscure "buy tim hortons coffee" featured minimum bids of ten cents. Some terms had some other advertising competition, but not very many people were competing for most of the terms.

However, the cost of many terms has inexplicably increased in the two days since then. "Tim Hortons" is now requiring a bid of 40 cents per click, even though there are currently no advertisements shown when the term is searched.

My assumption (which may be incorrect) is that Google identifies when advertisers start advertising, and it will then increase the cost as the term becomes demanded (even if only a single advertiser is using it). That way, it can encourage less-searched terms to be paid for cheaply while slowly milking all it can out of more desirable, though uncompetitive, terms.

This strategy is good for Google - in the last quarter, they beat estimates and expectations because they managed to earn more per click. But it's bad for merchants, who are looking to use Adwords to generate sales as margins and demand are squeezed in a tough macroeconomic environment.

But unlike my nasty experiences with eBay, I'll admit that what's bad for me isn't bad for Google at all. Many people and companies believe in the effectiveness of Adwords, and there really aren't many alternatives for little businesses with advertising budgets in the hundreds of dollars. Adwords has now expanded into print advertising (and radio and TV advertising), and it helps advertisers find space in major newspapers for huge discounts (I put an ad for Whacks in the major Salt Lake City paper last winter for like $10, thanks to Google).

As Google's search dominance continues to grow, and as Gmail continues to become the world's premier free email service, the revenues from advertising should continue to grow. Monetizing international markets, especially China, will be essential for Google's onward success. Google ponied up billions for YouTube, but they still haven't been able to figure out how to make money from it; luckily, the cash from their other operations makes the lack of monetization less of a problem for GOOG than it would be for another company. If Google can manage to start making money from these non-core businesses, their furious growth should continue.

Google's earnings are released Friday, and clarity into how revenues hold up during tough economic times will be seen then. On one hand, Adwords is a cheap way to advertise, compared to purchasing hundred- or thousand-dollar advertisements in newspapers or on TV. But there's a chance that the coupling of thriftiness from big companies - like mortgage lenders - or abandonment by many small advertisers (like myself) may pressure growth. I have no prediction to offer.

But as I listed all of the Google services I use, it became clear that Google has built an unrivaled internet kingdom. Its most popular services - Gmail, YouTube, Adsense and Adwords, and of course, the search engine - are the best that the Web has to offer, and they draw users in with little coercing. It's less-popular offerings, like Base and Checkout, are being bankrolled by Google's vaults in an effort to buy market share.

So in the end, my thriftiness may be indicative of one fact about Google - they make a ton of money. Don't hate the player, hate the game.

Earnings Season: Like Goin' to Vegas

As earnings season was in full force over the past week, investors were taken for a ride on a bucking bull.

I had a lot of fun and made a little money at the craps table, er, I mean, playing options of companies releasing earnings.

Early in the week, I took a bullish stance on Intel; they pleased the street and I came out ahead. Later, I also placed a bullish bet on eBay, but their earnings were not lauded by analysts (though I liked the release; more on that in another post). Thankfully, a 15% OTM put on SunPower (SPWR) just touched the moneyline, making my options worth something. (Side note: I'm very short-term bearish on solar stocks; I'll post about that later too.) On Thursday, I made two bets, on E*Trade and Citi, which both ended up being slightly profitable; however, I passed on the biggest surprise of the week, the company that owns the internet, Google.

I was looking at Google options but ultimately decided it would probably be like throwing money away. After all, the level I was looking at $490 or $500 calls) were $50 out of the money - I thought that they would surely expire worthless, even if the report was good.

I was wrong, and it hurt. The $60 contract of $500 April calls sold for between $2,500 and $4,700 on Friday. Lots of wealth changed hands in the way-out-of-the-money contracts; what was selling for dollars or pennies on Thursday was worth 50-100x as much Friday. However, as a (self-proclaimed) long-term investor, I have to look past such fanciful missed opportunities and focus on the future.

Lots of companies still have to report their quarters over the coming weeks. I will post individual thoughts, analysis, and predictions concerning the coming days, or even specific companies.

What did I promise again? A bearish writeup about solar stocks, individual earnings predictions... I'll also tease and say I'm going to write about the attractive value of PetroChina - keep checking back all week for the frequent updates.

Companies reporting that I'm eyeing up this week:

Monday: BAC, NFLX
Tuesday: MHP, OXPS, YHOO, VMW
Wednesday: UPS, AMZN, AAPL, CMG, NTRI
Thursday: POT, PEP, OXY, COP, MSFT, WDC, DECK
Friday: HMC

I'm expecting good news from some, and bad from others. Let's crank up the guessing machine.
"I trade with TradeKing: $4.95 stock and options trades, plus lots of tools. It's simply the best way to invest. Click here to find out more.

Google Longs got Lucky

The mighty Google has now fallen about 30% from its November high; the last time shares trade below $500 was a full six months ago. The most recent 10% of that decline has occurred in the past week, as the bombs keep dropping on Google. These losses certainly are nothing to sneeze at (and I sympathize for investors who bought in at $730 on the heels of a Cramer recommendation), but the losses really should be even more significant.

Let's look at the news that's dropped in the past week. First, when Google reported its earnings, they missed both top-line and bottom-line estimates (though, admittedly, I think big movements after a 1% disappointment [which is how much Google missed buy on the EPS] are illogical). However, when a stock is priced for near-perfection (as Google certainly was a $750, and to some degree, still was/is), the most minor disappointment can be devastating. (Usually, Google beats and raises estimates.) So after the earnings miss, the stock did drop about 8% after-hours, but even that was relatively minor compared to recent collapses like Apple and VMWare after their disappointments.

Then, the bad news kept coming. After the earnings disappointment, Jefferies & Company downgraded the stock (from buy to hold) and reduced their price target from $725 to $600 (All of this information taken from here, a AP press release found on Yahoo! Finance). "Meanwhile, Citi Investment Research analyst Mark S. Mahaney cut his Google price target to $650 from $775, while RBC Capital Markets analyst Jordan Rohan lowered his target to $675 from $725" (AP press release). One downgrade and two additional price-target drops should have kept Google falling.

Lastly, the news about the Yahoo/Microsoft merger should have been the proverbial straw that broke the search engine's back. If the deal goes through, Google will finally have a serious competitor. With Yahoo having the largest pool of email users and Microsoft providing most of the world with operating system and office software, the companies' strengths should compliment each other well. Google has been trying to break into these areas with Google Apps, Docs, and Spreadsheets, but has failed to displace any significant amount of Microsoft users.

Maybe Yahoo's board or shareholders will reject the offer, or some suitor (many analysts have speculated Newscorp could be one) may come along and bid higher. However, if Microsoft's offer is approved, I don't see antitrust courts blocking the merger. Google controls over 65% of the domestic search market, and leads throughout most of the rest of the world too. Though the vertical integration (operating system -> office suite software -> browser -> search engine) may be scrutinized, I don't think Google's lobbyists (yes, they have lobbyists) will successfully prevent a merger.

So back to my original point - Google has lost $50 in share value since the earnings news dropped. Many Google longs now flaunt Google as a "deep-value" now that it's at $500. But considering the deluge of bad news that's been released in the past week, I wouldn't be surprised if GOOG was currently $100 cheaper.

Don't get me wrong; Google is one of the most incredible, breakthrough-creating companies of the past decade (and will lead the way in the future). But as it becomes mature, it's valuation is looking too rich. Intel and Cisco trade at 13 times forward earnings, while Google is still at over 20 (and one could easily argue that those estimates may not be met). As Google enjoys its domain as a large company, it may have to start trading like one too.



"I trade with TradeKing: $4.95 stock and options trades, plus lots of tools. It's simply the best way to invest. Click here to find out more."

Is the Worst over at Syntax-Brillian?

I think so.

Syntax-Brillian (BRLC) is still over 60% off of its all-time highs reached one year ago. 2007 was certainly an awful year for any stubborn BRLC long. (Thankfully, as I've noted before, I was on the sidelines for most of the decline.)

I jumped back in with long stock and call options when the stock was around $2.75 just about one week ago. I figured I'd give BRLC one last chance.

There's a few reasons why I think now is a fine time to buy back in. As I've previously posted, there was some speculation that there could be a buyout or merger that may affect BRLC, whether with Vizio or another company. Those whispers have settled down, but since the stock price is so depressed, it's still an attractive takeover target.

The stock is so cheap. It's current price/sales ratio is just .4 - compare that to the 14 p/s ration of Google. The unbelievable p/s ratio shows that the stock has plenty of room to run. Anything under 1 is dirt-cheap, while a high-growth stock like BRLC can have an acceptable ratio with a low-single-digit figure.

During late 2007, the stock price was probably depressed even further by tax-loss sellers. During December, lots of the negative and sideways price action was due to these chronic sellers.

The price of BRLC shares have started to tick up in the last few sessions. Coming off of a low around $2.50 on December 19th, Syntax shares are up over 20%. Each of the last six sessions have been positive. It's clear that this is BRLC's most significant, long-lasting upward action since it began its final downward slide this fall. Excluding the $1 one-day bounce in October, there had been no serious upward action whatsoever. But now, the stock has strung together a week of gains and just crossed through the 50-day moving average. Based on a history of BRLC, seen below, this may be very significant.

BRLC has clearly had its ups and downs over the years. But one pattern is undeniable; once BRLC breaks through the 50-day moving average (the blue line) after a long drop, it doesn't look back. In both the spring of 2005 and summer of 2006, BRLC lost much of its value, crossed the 50-day, and went on to set a new all-time high. I'm not going to start saying that BRLC will be at $15 in three months, but this does seem to signal the end of the bearish cycles.

All of that is just tecnical, too. It ignores the chance of BRLC blowing away holiday sales statistics or any other positive news. So there's many reasons for BRLC to trek up from this point; cheap valuation, buyout potential, positive earnings potential, the change in charting indicators, and the fact that it's still down so significantly from its high. BRLC had been tossed around (rightly so, at some points, when management failed shareholders) for a long time; now, it's time to turn its act around.

I can see BRLC doubling in 2008. Is it guaranteed? Certainly not. Is it possible? All signs point to yes.





I trade with TradeKing: $4.95 stock and options trades, plus lots of tools. It's simply the best way to invest. Click here to find out more.

A Weak Week?

Note: This is published before the markets open for the week of 11/12.

The performance of the major indexes over the past week can be viewed two different ways.

As I have said before, predicting the market is nearly impossible and (overall, for a long term investor) generally fruitless. However, when writing a blog about the stock market, it's necessary and fun.

This past week, the Dow and S&P 500 both shed about 4%, while the NASDAQ endured an 8% haircut. (The majority of these losses came on Thursday and Friday, with some of the indexes and many individual stocks actually posting gains between Monday and Wednesday).

Many of the high-flying tech stocks (that I shorted in my fantasy portfolio; read my previous post) led the market downward.

• Google lost over 10%
• Research in Motion dropped over 20%
• Baidu.com dropped nearly $100 from its all-time high around $430 early in the week to $340 on Friday
• Chipotle Mexican Grill, on which I stated I had a bearish outlook, lost about $20 from $140 to $120
• Even the blue-chip Cisco lost 10% after reporting good (but not spectacular) earnings

Both the S&P 500 and Dow are both within a few percent of their mid-summer lows, with the NASDAQ a little farther away due to a bigger run-up in recent months.

Many professional analysts cite those summer lows as an important level of support. If indexes crash through those lows, look for new, much lower bottoms. But if the markets tap the barrier and bounce back, the bull market may be revitalized.



However, looking at it simply instead of technically, I see reason for weakness to persist in the markets.

Oil, though now off of its highs, is still in the mid-nineties per barrel. Gasoline and other distillate prices are now only starting to catch up to the rise of the price of oil, so watch for consumers to now finally be effected by $90+ oil.

The dollar is crashing. Though such terms haven't been used yet, and though I'm not an international monetary policy specialist, I'm comfortable using that term. After reaching parity with the dollar within just the past month or two, the Canadian dollar now trades around $1.05. When currencies are appreciating faster than markets (with 5% monthly changes of 10+% yearly changes), I think that the depreciation is becoming dire. The dollar is hitting new lows against the Euro on a daily basis. As the Fed continues to weaken the dollar through cutting rates, it's making the problem even worse.

Lastly, the subprime problem is far from resolved. Major banks and investment houses continue to write down their books for losses in securities. Major corporations like Bank of America, AIG, and Morgan Stanley are plummeting in value. Homebuilders, though recently pushed out of the spotlight, may still be in danger of going bankrupt. As the cost of imported goods starts and continues to rise, Americans won't have money to buy houses.

There are just too many logical reasons why the market could continue to go down, while there is little logic for an upside bounce. I own some puts in an ETF that tracks the S&P 500, and when they expire this week, I may buy an Ultrashort ETF. I could easily be proven wrong in the short or long term, as political, economic, corporate, and emotional conditions change, but I see no reason for the markets to immediately rebound in the context of today's environment.

SHORT!

I want capitalize on the current volatility.

Right now, my real-money portfolio is nearly 90% invested; I have some SPY puts, and then about 8 different stocks. I'm happy with all my positions right now, so I'm not really looking to actively trade that portfolio soon.

However, I just entered a trading competition sponsored by my university. Finally, I get to employ lots of risky strategies that I wouldn't do with my real money.

The competition opened today, and my first move was to short, short, short.

I shorted:
Apple
Bidu
AIG
Amazon.com
Google
RIMM
QQQQ
Petrochina
SPY
F

If the market continues to be sour (after the 3% loss on Nov. 7), the returns will be lucrative. All of the above stocks (except for the exchanges, F, and AIG) are high-growth momentum plays. If momentum stops, there's no telling where the floor will be.

Of course, I'm long stocks too (I'm about 1m more short than long in a $5m portfolio). I own:

BWLD
ANF
ATVI
TM
JAVA
and a few others that I'll update later.

Literally every stock, both long and short positions, fell today, but the shorted ones fell more, so I'm currently in the lead.... after the first day of trading.

As for my general take on the market:

It seems like there's a lot of reasons why there could be a correction now. The dollar is crashing, oil is still high, Morgan Stanley just wrote down $4B, WMU, Freddie Mac and Fannie Mae are under review for lending policies, and the market has just been strong lately.

Could the market rebound nicely tomorrow? Sure.
Could it fall 10% over the next two weeks? Believe it.

Predicting the market movement on a day-to-day basis is impossible and fruitless, so I cannot and will not say if the market will be up, down, or flat tomorrow.

But keep in mind that stocks like Apple, Google, and Baidu have P/Es that are 2 or more times higher than there rest of the market. When momentum runs out, it's a recipe for disaster stocks like those above. Google is itself a big enough entity to drag down the entire market; just keep an eye out for the potentially-dangerous situation that this can create.

Back to Mindless Buying...

Pardon me if I sound a little bitter, because I am on the sidelines, missing out on the spectacular gains.

But the enduring bull run of the hot tech stocks like BIDU, GOOG, RIMM, AMZN, AAPL, and others truly baffles me.

Apple gets some leeway, because it did just report excellent earnings, and it seems to be the most fundimentally-solid out of the above mentioned companies. However, it was one of the laggards of the group today, up ONLY 7%. (Of course there's nothing to prove this next claim, but if my father is reading this he could agree: I actually thought Apple would blow out the quarter on good Mac numbers. In my opinion, that's going to be the the main (or only) thing that will allow them to keep up their hypergrowth.)

Google was up $25 to $675 on no real substantial news; it looks to blow through $700 easily. The momentum is simply unstoppable.

Amazon was up 10% today purely in speculation of good earnings. With at trailing P/E of 140 and a forward P/E of 70, the earnings are going to have to be unbelievably good to merit the gains.

And best of all, BIDU and RIMM were both up a solid 10% on no major news. I guess if you have a four-letter symbol and are either selling smartphones, a search engine, or have a website, the value of your shares will ALWAYS be too low at the current prices.

Meanwhile, there's companies like NutriSystem (NTRI), which trades at a current P/E of 9 and a forward P/E of 8, that are getting no love during the rally around them. Sun Microsystems (JAVA), a reliable producer of tangible software and goods, has been flat lately as the gains of the intellectual-tech companies are halfway to the moon.

Whenever people write articles like these, Techlovers will always reply that this is what people said when Google was at $160 and after AAPL and RIMM had merely doubled (both are up much more since then).

However, people were obviously still buying tech stocks at the height of the bubble in 1999 and 2000. There are huge difference between then and now; the above-mentioned companies all ARE making money, while 7 years ago, many techies were not. However, the above companies will not all grow at 30% or 50% indefinitely; if Apple can't think up the next "IT" product, or if Google can't enter a market besides search, growth rates will surely fall, and P/Es should too, back down to earthly levels.

Just think: If Amazon's forward P/E fell to the level of Apple's - a generous 30-35x, it would be trading at half of its current price.

Black Monday 2: October 22, 2007

Note: The chance of this actually happening is minute. This isn't a prediction of what WILL happen, but just speculation over an event that has a tiny chance of occurring.


Investors marked the 20th anniversary of Black Monday on Friday by selling off each of the major exchanges by 2-3%. Bad earnings may have initially triggered the downturn, but it seemed as though investors simply wanted to mark the anniversary with a decline.

However, as the official anniversary passes, I think that the conditions now are the most reminiscent of 1987. If there was or is a time to speculate about a crash, that time is this weekend.

Here's why:

During the week preceeding the crash, the Dow lost about 10% of its value. This past week was not nearly as bad, as the market lost a little less than 5%, or about 600 points. Though not as severe as a drop, it still bears a very eerie resemblance to what happened then. Here's a chart of the Dow over the past week:

Not a pretty chart.

As it's been stated in every other writeup about a potential 2007 crash, the general market conditions are similar; high oil, weakening dollar, and more.


So, why do I think that there's a slight chance of a crash (or correction) in the future?

First, the emotional aspect to this coming Monday. As I am writing this post, a front-page article on MarketWatch.com compares this past week to the week proceeding the crash. As analytical articles of 1987 state "investors had a weekend to ponder losses from the week before," now, today's investors are pondering this week's losses in light of 1987. There's certainly possibility of an irrational, emotionally-driven over reaction on Monday.

The other thing that increases the possibility of a crash, and concerns me, is the high valuations of certain stocks and industries. It's true that the overall market valuation today is less than it was in 1987, with P/Es then higher than they are today.

However, certain sections of the markets have rich valuations: popular tech companies like Apple, Google, VMWare, Amazon.com, and Research in Motion all trade at 30-80 forward P/Es. A 10-20% shaving off of the top of any of those stocks would not be uncalled for.

If Apple or Google were to lose 15% of its value, it could easily trigger a ripple-effect sell off through the broader market. Those tech heroes both represent the current bull market and actually hold lots of investors assets, many of whom may have purchased recently as companies are making new all-time highs. Investors may sell off early to minimize losses, and this effect could be worsened by stop-limit orders that some investors have in place.

Lots of Chinese companies are similarly situated; speculation over the high-growth stocks has created rich valuations, and as the recent 50+% decline in some solar stocks shows, losing a significant amount of value in a very short period of time could occur.


This hypothetical crash would probably begin the same way that 1987's Black Monday did: US investors wake up to news of major, but not crash-level, sell offs in Asian and European markets, in response to US losses on Friday and their own sky-high valuations. (With India's market losing 10% of its value in one day just a week ago, and with Shanghai doing the same earlier this year, a 10% decline on any Asian market isn't too unrealistic).

American investors, shaken by the 5% drop last week and the 5-10% Asian drop overnight, coupled with the emotional fear of a repeat of Black Monday, start selling as soon as the premarket opens. Baidu falls $100, or 33%. Google loses 15%. Apple (who releases earning after the bell, which everyone now forgets about) is down 15% too. Banks, who reported bad earnings this past week, would mirror this fall due to financial fears. Investment banks, with lots of money tied up in mortgages and tech stocks, would also begin to suffer.

A wave of selling has spread throughout the entire market by noon. The tech-heavy, high-PE Nasdaq loses 15%. The Dow and S&P don't fare as poorly, but both are down about 10% too. Things could get very, very ugly.




Now that my scenario is outlined, do I believe that this WILL happen? No. If I did, 70% of my money wouldn't currently be long in equities. I do own puts in ConocoPhillips and the SPDR ETF, so I have slightly insulated my positions against a big loss. But if I thought a crash was inevitable, I'd be 100% cash, or puts, or shorted stock.

The possibility of a 1% gain tomorrow is much, much bigger than the prospect of a 10% loss, but I just figured I'd chronicle my thoughts as every investor is nervously awaiting Monday. Do I want a crash to happen? Absolutely not. But, as my position in SPDR puts suggests, I do expect a correction in the reasonable future, and wouldn't be absolutely shocked with a more sudden drop.

Cramer's hype and two lessons on 10/11

I am not a fan of Jim Cramer's mad money show. I have to credit him for being a great investor during his hedge fund days, but he has been reduced to a cheerleader on his television show.

Take, for example, what he said on his show just yesterday. Here is a direct excerpt from the TheStreet.com writeup about the October 10th show:


"At this point you have a duty to yourself and a duty to your wealth," Cramer said, "never to take financial advice from anyone who doesn't recommend Google." Analysts that knock Google can only be so wrong about a stock for so long before admitting they're wrong, he said, and it's time for investors to stop paying attention to the bears.

Cramer said his price target for Google has always been lower than where he actually thinks it's going to go.

Cramer then raised his price target to $750. "This is a total and unequivocal lowball estimate," Cramer said.

This estimate might seem overly exuberant, but Cramer believes it's based on genuine arithmetic. If Google earns $20 a share next year and continues its trend of 30% growth, it should hit $750. He then said that a nonconservative but rational price estimate would be $900.

It's truly irresponsible and unprofessional for a man of Cramer's reputation to pump up a stock like that. Calling analysts that do not recommend Google sissies or idiots is disrespectful and uncalled for.

Let's see how well Cramer's "four horsemen" did today:

Google, -.5%
Research in Motion, -8%
Apple, -3%
Amazon.com. -6%.

Those numbers don't necessarily show how bad a Cramer-follower could have done; all but Amazon rebounded from intraday lows. At one point:

Google traded at prices as low as $609, after an intraday high of over $640. An ameture trader could have really gotten burnt.
Research in motion spent much of the last two hours of the day down over 10%.
Apple also fell almost 10% before recovering some ground.

It's also worth mentioning that Baidu.com, another stock Cramer pumps, lost over 10% of its value today.

My point is that Cramer's constant pumping reminiscent of the market sentiment in 1999 will only hurt his beloved viewers. As his four horsement hit daily highs, Cramer hit "Buy, Buy, Buy." If these stocks correct to appropriate levels, average, ignorant investors that fell victim to Cramer's antics will be left holding the bag.

So my two lessons:

Don't by into hype; do your own independent research. Are Google and Apple good companies? In my opinion, yes. Are they good investment ideas right now? Maybe not.

Secondly,
Don't be as yellow-bellied as I am; have a little courage.

I bought an Apple October 160 put contract for $1.60 on Octover 9th, looking for a pullback that I believe is due. I sold them early today for no gain, because I was worried about a continued rally.

The options closed at $3.60 today, after a few trades above $6. If i had followed my CORRECT investment instincts, I would have made out handsomely while the market got punished. However, I bought into the hype myself and it cost me a couple hundred dollars.

And, because I love being kicked while I'm down, I decided to personally add some insult to my injury.

After I sold the Apple puts, I bought Google's October 560 Puts for $.90. I sold them for a modest gain after the stock dipped for $1.20.

Once again, I should have followed my instincts; the options closed at $2.25 today after trading above $3. I would have realized returns of hundreds of percent today if I would have just believed in my ideas.


So enough rambling. My point is, I made to very, very stupid trades, influenced by the sentiment that I was trying to play against - the overhyped, artifically-inflated hysteria that had been sweeping the market.

Just to clarify, Those two trades represented less than 2% of the money that I manage; my equities were actually up today. So, I didn't lose money, but stupid, sheepish trading prevented me from making a couple hundred dollars today.

My message to you is this: be braver than I am. Do your own research, and when you come to factual conclusions and believe in your idea, stick with it.

Don't be influenced by Cramer, any talking head on TV, or even myself. I encourage independent, smart investing.

I'll admit my mistakes, and chock this one up to a powerful, yet unfortunate, learning experience.