5Reds : Intelligent Investing & Power of Compounding

Portfolio Update on HP and Google’s new adventure

Today, I got out of the stock HP on my personal portfolio. It was one of the most satisfying investments in recent times. I pretty much begged most of my family and friends to buy into HP when it was trading at $11/share. The price went up to $35/share today and my last block was all sold. It was one of the no-brainer investments as just the Cash flow alone supported the current prices. Meg Whitman, the current CEO, is also an able manager and she is turning the company around much better. I am very certain if HP makes strides in innovation, it can double from the current prices.

Can I guarantee that it will double from current prices? No. I can’t. HP is a technology company. We all know that innovations in that industry can change a company upside down in no time. HP is also in a industry that is in decline for along duration. PCs are out of favor, tablets are in. HP is trying its hand at tablets and so far they haven’t got it yet. Given the above scenarios, the decision to sell was very easy. Will I ever buy into HP again? Yes and only if the investment thesis makes sense. For now, I am enjoying a good gain of over 100% in a short duration.



Google’s interesting Venture

Google is trying to innovate in 100 different fields and self-driving cars are one. They have shown it over the past years and I have had my apprehensions if they can be viable products albeit being profitable from them. A few days ago, Google announced that the former CEO of Ford – Alan Mulally has joined the Google Board. Alan Mulally was single handedly responsible for Ford avoiding the bailouts needed for GM and Chrysler. He was a great CEO who turned around Ford and is now joining Google as a Board member.  It will be interesting to see how his presence will impact the Car Industry. I will write more as I hear. But for now, this new hire is very, very interesting.





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