I like Google - primarily for the utility of their product and the respect I have for the corporation’s pursuit of innovation. As for the stock, HEDGEfolios has had a DOWN signal since November 12, 2007 when it was trading at $657.74. To be fair, I have been very even-handed on my opinions for the likely direction of the stock. Since I first started covering GOOG in September 2004, I have given 14 signals - 7 UP and 7 DOWN. Only one of those was wrong with a loss of 10%.

Throughout this whole time, I have watched Price Targets on GOOG get ramped up and often in $100 increments. Two years ago, I wrote a post called Moving Targets - if you read it, you know I don’t do price targets and I have little use for them. They are great for hyping stocks, especially for high profile / high growth momentum stocks like Google. When you had Cramer or some analyst seeking attention by slapping big price targets on GOOG as it was heading higher, they got a lot of positive attention like the $985 target given at the end of October, 2007. But just consider where we are today on this stock relative to the targets. Click here for the current summary of GOOG estimates. Pretty pathetic.

One of the big problems for using price targets is that they encourage you to buy when the stock slides. Take a listen to Cramer’s 11/14/07 explanation of how to buy GOOG on the way down and when you do, just know that the Michael Steinhardt he references is not me. For the record, I don’t advocate “averaging down” either.

The next time you hear a price target increase being hyped to encourage you to buy a stock, please consider this example.