Friday, September 30, 2005

Google in S&P 500?

Google was up today 2,2% or $6.14 to close at 316.46 at rumors that they will be added to S&P 500. Colgate has been bought by Procter and Gamble, which leaves potential room for Google. Being in the S&P 500 means, that a lot of fund managers will need to buy Google shares for their massive portfolios, since a lot of them track their fund towards the S&P 500. So what most of them do is basically own whatever is in the index, and then just make some different investments that they believe in. This way there is a lot of buying of a share, when it enters the index, because the managers need a certain level of the stock for their fund. Apparently the rumors that Google could be added to the index has spurred some buying, which has led to the higher price.

Does the fact that Google in after ours trading is down to 312.40 mean that it did not get in S&P 500? I'll get back on this!

Yes (or no), Google didn't make it this time. Believe me, its just a matter of time. Google will enter the S&P 500. Some say within a year, some guess between Christmas and New Years. But when it happens, you can be sure, the stock will go up.

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