Filed under: Magazines, Google (GOOG)
Google’s (NASDAQ: GOOG) disappointing third quarter brought the bears out of the woodwork. In a recent column, Fortune Magazine’s Geoff Colvin makes the case that Google is overvalued.
Sure, it’s a great company with terrific management and it has generated tremendous value for shareholders. Colvin essentially argues that Google has been earning extraordinary returns on capital and that, just to maintain its current price level, it will need to earn even better returns in the future. As Charlie Munger has said, few businesses have a future as good as their past.
Anyone who owns shares of Google or is considering buying should read Colvin’s insightful article. Given the extraordinary returns, thousands of brilliant young minds are working around the clock hoping to dethrone Google’s leadership position.
I would be careful with this stock.
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