Stocks Lower into Final Hour on Profit-taking and Higher Long-term Rates

BOTTOM LINE: The Portfolio is higher into the final hour on gains in my Internet longs, Networking longs and Computer longs. I have not traded today, thus leaving the Portfolio 100% net long. The tone of the market is negative as the advance/decline line is lower, every sector is declining and volume is above average. Google (GOOG) is rising another 1.7% today and is making a new all-time high at $515.79. So far, my long additions to Google into the weakness a few months ago are paying off. Even at a new record high, I view the stock as undervalued and believe it will prove a devastating mistake for global technology fund managers to exclude this company from their portfolios. I continue to believe it is beyond comprehension why investors are willing to pay 50x forward estimates for Yahoo! (YHOO) and only around 30x conservative forward estimates for GOOG, which is arguably the most dominant growth stock in the world. My $600 per share target on Google before year-end is now looking conservative as numerous upside catalysts are coming to the fore more quickly than I had anticipated. It still isn't too late to board the Google train, in my opinion. My largest long position remains Google, with Apple (AAPL) a close second. I expect US stocks to trade modestly higher into the close from current levels on buyout speculation, more economic optimism, lower energy prices, short-covering and investment manager performance anxiety.