Alphabet Inc (GOOG): GOOG 825? By Jim Cramer RealMoney.com...

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Re: FinancialAdvisor post# 4987

Tuesday, 11/21/2006 3:43:19 PM

Tuesday, November 21, 2006 3:43:19 PM

GOOG 825?
By Jim Cramer
RealMoney.com Columnist
11/21/2006 2:32 PM EST

When will people understand that it is, in the end, the P/E -- the price of the stock divided by the earnings -- that controls?

I have been inundated with questions about where Google (GOOG - news - Cramer's Take - Rating) can go, as if it's a plane that is breaking the sound barrier and people want to know if it can possibly get to Mach 5. You have to figure out what Google is worth based on what it will earn and what people will pay for it.

I don't understand why Google doesn't command the highest multiple in the market, something like 55 times, but the absurdity of saying $825 to those who don't understand this kind of analysis causes immense problems.

People think you get it out of thin air.

Google is going higher. It is going higher now.

Because getting to $600 -- where it is valued at only 40 times earnings -- seems, alas, not that hard.

When it gets there, I will leave it to those who like to clock the velocity of planes.

http://www.thestreet.com/_tscct/markets/activetraderupdate/10323651.html

"Growth is all that matters!" CRAMER