Is Google Inc. Stock Overvalued?

It's increasingly difficult to justify Google's valuation. Is it time to sell?

Mar 26, 2014 at 1:00PM

Google (NASDAQ:GOOGL) stock has been on fire recently, soaring past $1,000 last year and gaining a total of 43% in the past 12 months. With such an incredible run-up in the stock price, it's a great time to revisit valuation. What's the stock really worth?

Fool contributor Daniel Sparks recently ran some numbers to come up with a ballpark figure for the fair value of Google shares. Using a discounted cash flow valuation model with a 10% discount rate, Daniel suggests that Google is fairly valued at best.

But even if Google stock were overvalued, it probably wouldn't be wise for investors to sell. As long as the underlying business is meeting or exceeding expectations, it's usually best for shareholders to hold even when shares seem overvalued. Of course, if shares get into grossly overvalued territory, that would be another story -- but Google isn't even close to that point.

Find out more in the following video about how Daniel valued Google.

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Daniel Sparks has no position in any stocks mentioned. The Motley Fool recommends and owns shares of Google. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

A Financial Plan on an Index Card

Keeping it simple.

Aug 7, 2015 at 11:26AM

Two years ago, University of Chicago professor Harold Pollack wrote his entire financial plan on an index card.

It blew up. People loved the idea. Financial advice is often intentionally complicated. Obscurity lets advisors charge higher fees. But the most important parts are painfully simple. Here's how Pollack put it:

The card came out of chat I had regarding what I view as the financial industry's basic dilemma: The best investment advice fits on an index card. A commenter asked for the actual index card. Although I was originally speaking in metaphor, I grabbed a pen and one of my daughter's note cards, scribbled this out in maybe three minutes, snapped a picture with my iPhone, and the rest was history.

More advisors and investors caught onto the idea and started writing their own financial plans on a single index card.

I love the exercise, because it makes you think about what's important and forces you to be succinct.

So, here's my index-card financial plan:


Everything else is details. 

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