We’ve had Google as a core long name in our portfolio since their IPO.Â As the company grows and the stock appreciates there is often an anxiety around if they still "have IT" to keep the momentum going.
The short answer is that we still thing so and since we maintain our Intrinsic Value (IV) estimate of $800/share the current price is very attractive to us right now.Â Â We’d start to move up to a full position at these levels.
As a company grows it’s often the management team that concerns us.Â The founders are young and the CEO, Eric Schmidt just seemed like the luckiest guy in the world more than anything else.
However Eric has grown with the job and is of course a very bright guy (went to Carnegie Mellon after all!) and has had quite a bit of experience.
This video interview of Eric from May of this year is an hour long but important to watch.Â Google is doing some interesting things in building the culture and the management of the company that are as important as their technology and traffic growth.Â We don’t buy the "do no evil" line but many of their organizational ideas are part of what makes them continue to be successful.
[If you want to skip any part there is a time in the Q&A when a woman starts talking about how much her young daughter knows Eric Schmidt that is worth the effort to skip.Â She blathers on for over five minutes who doesn’t really even have a question after her "preample" which she insists was necessary in order to waste everyone’s valuable time.]