The unbelievable has happened.
A share of Google, Inc. has surpassed $700.00 U.S. To be exact, as of Friday’s close, the price is $711.00.
Also as of Friday’s close, gold bullion has reached $808.00 U.S. per ounce.
What is an investor to do?
Buy Google stock at 70 times last year’s earnings? Even more disheartening for tech fans: Google’s book value stood at $55.00 a share at last year end. Yes, the Internet is hot again. Yes, everyone Googles. But is the company really worth $220 billion? Will it generate the ongoing revenues and earnings analysts look for or will it eventually become embedded in uncertainty because of some bad deals like all hot stocks usually become.
Don’t get me wrong. I started pushing Google many hundreds of dollars ago. And I believe the stock will eventually surpass $1,000 per share. But if I had just $700.00 to $800.00 in the world to spare, it wouldn’t be Google stock I’d buy.
Last week, quietly, without much fanfare in the major daily newspapers, gold bullion passed the important $800.00 U.S. per ounce price level. I started recommending gold to PROFIT CONFIDENTIAL readers when the metal traded below $300.00 U.S. per ounce (only a few short years ago). So I’m obviously proud to see my prediction come to fruition.
It was also me, your faithful market junkie, who predicted we would see gold end its bull market in the thousands of dollars. Do I see gold bullion going to $3,000 an ounce? Yes, is my answer. With a U.S. hell-bent on lowering its currency, I’d take gold bullion over other paper currencies anytime.
So yes, I think gold bullion could reach $3,000 U.S. per ounce much quicker than the market expects. As for Google, I’m not saying the stock couldn’t reach $3,000 a share: It’s just that it may not happen for years to come.