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I would sell
I would lighten my exposure to Google a little each year. It can still be the biggest single stock in your portfolio, but reduce the overall percentage to something you are more comfortable with. Remember that Enron employees were happy with their non-diversified portfolios for years as well.
Why so slowly? Do it now!
If you had a massive pile of cash would you ever to chose to buy such a concentrated portfolio? That’s how I think of things
Yep. I'm very bullish on my current company -- crazy CAGR over the last 10 years, well above the S&P 500.
That said, "ya never know what could happen." 100+ years of stock market history has shown that diverse portfolios simply do better in the long run. A quick search on the platform of your choice (cough Google cough) will verify that what I say is true.
Keep some. Sell until it's 20% of your portfolio. If Google dies you'll still be fine with 80% of your wealth. Yet 20% is a nice chunky allocation. So win win.
Always sell and diversify
I have a similar issue and I’ve debated it in my head a lot. I think the one variable that is proving most important in my mind is your age and when you want to retire. I think if you are looking to retire in 10+ years I think you hold (unless you really have a better compelling reason to invest it elsewhere). Google is a leader in the industry and there is a huge moat to compete in that industry and the demand isn’t going anywhere. If you are under 10 years to retirement then you ask where would you divest it to? I am thinking selling 10% a year and make extra payments on my house or maybe an ETF. I’m under 10 years and have stopped doing the employee purchase plan and will likely start divesting 10% a year starting in the next 3-5 years. I’m not a financial advisor - this is just here my head space is at. Curious to hear what others would do.
Chief
The compelling reason to hold it elsewhere is that index funds are better than stock picking, which is a fool's errand.
Shouldn't you be answering this for us shareholders who are not employees? Lol.
See Director's comment above for my advice with an additional, "This is heavily dependent on the individual holder's goals and circumstances."
One word - Lehman. Look it up if you’re unaware.
Highly diversified portfolios only do better for idiots who can’t think. Read some Charlie Munger and Peter Lynch.
Google is 1/4 of my portfolio and I’m not even an employee. You guys are going to be the AI winners. Anthropic uses your TPUs and your models are second best with Apple recently acknowledging that. With the Apple deal you own 100% of the consumer device AI market and with Msft and open ai imploding you will own the enterprise ai space too lol.
If you believe in it have the conviction to not diversify for the sake of it.
If there’s another company you believe in more then sure. Sell a bunch of your stock and buy theirs.
Chief
Maybe "idiots who can't think" would include people who could come away from famous Charlie Munger and Peter Lynch quotes thinking they mean the opposite of what they mean.
Google is my largest holding in my portfolio. I am very bullish on them long term. I would certainly hold.
The rule of thumb is 10% so you don’t seem completely out of whack.
If you worked for nvda , TSLA , broadcom , palantir , ect.. would you say the same thing ? If so , why Google out of all those stocks ?
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You can have a tough time, but I know I would most certainly not have a concentrated position in any of those companies -past performance not always indicative of future. Goog I would, even if i were not an employee. Just a matter of how much
I worked at P&G until mid-2000. It was a company that made many millionaires before the tech boom. So many employees were bullish as well as “loyal”, so they held. In March of 2000 the stock dropped like 30%. I knew three people who were planning to retire that year and they each ended up working for a minimum of 3 more years.
And then there was the Enron disaster.
I’m not saying sell it all. If you’re over 40 sell 80% of your grants the minute you get them. Over 50 up that to 90%. Roll it back to 75% if you’re younger.
Chief
Why keep 10%, 20%, or 25%?
EY, Director 1 and Baker Tilly 1 have really good thoughts. So does KPMG
Personally, in 2000 I ran into a potential client who had a "diversified portfolio" of 4 stocks. Microsoft, Intel, Gateway and Dell. Her financial advisor (Stock Broker) retired.
I told her to sell, sell now.
She wouldn't due to the tax hit. I showed her how dangerous her portfolio was, valuations, etc.
No good.
I called back when things began to crack. Her reply, "too much in capital gains tax"....
It got worse. In a few months she was calling me. I told her the same thing. Maybe put it in a a Chartiable Trust. Her reply: "Nope, too much in capital gains tax", or, "I lose control".
It got worse. Her and her husband came in. Same situation, same reply....
GREED!
In 2010, I ran into an old girl friend. We were talking. I told her the story. She said, "Oh my, you're the one"!
I didn't know exactly where she worked.
She went on, "Our office manager always tells the story about this guy that told her to sell her stock, take the hit and re-invest. Had she done it, she would have retired a long time ago"
And she would have.
Since 2000, I have run into the Enron people after getting wiped out, the 2008 people who got wiped out and others who had "the greatest stock ever"
Diversification and even cash can be wonderful at the right time. So can concentration.
Knowing your risk tolerance, your plan, the right time and the right measure is the key!
Oh, True Story!
AtlanticMidwest.com
I think it is a good idea to diversify out of such a concentrated portfolio, probably diversify in stages rather than all at once. Even if you buy into an S&P 500 index mutual fund or ETF you should be concerned about the concentration in the Mag 7. They make 35-40% of the 500.
One move I made was to buy into an ETF that covers the S&P 500 but cuts out the Mag 7 although I have exposure to the Mag 7 elsewhere. I would also consider ETFs that focus on companies that have a record of dividend growth snd have low expense ratios. Vanguard and Schwab have them. The tax rates on dividends are lower than the rates on wages, in my view an unfairness in the tax code but an unfairness that benefits me and probably you.
I would also have a fraction of my resources in safe harbors in anticipation of the day the market craters. It always does. I weathered the 2008 crash ok. Safe harbors include T-bills, mutual funds that concentrate on low-duration bonds, etc.
I also note that because I am retired (I take on a little work if it interests me—not for the money—and I still conduct research and publlish), I have to consider that I don’t have the time that younger readers have to recover from the inevitable market crash. Readers of my comments need to factor into their planning their age, the age of their spouse, the children and others who depend on them such as a parent or other relative, a charitable organization they are committed to, etc.
Chief
Why would you diversify away from mega cap US technology by choosing an even narrower slice of the market than US Large (US Large less tech, US large dividend growers)...
...rather than by adding US small cap and international stocks?
You are "diversifying" by getting even less diverse.
Follow along with your executives and sell a similar percent of holding that they are. They have to report their sales on an SEC Form 4. Make sure theyre not selling to pay taxes on a grant or something. But if they directly sell 5% of their holding, sell 5% of yours. I am talking about pichai and Porat in particular
IMO it’s ok for it to be a large portion of your holdings but should be less than 30% of your net worth - so if you have enough S&P500 and broad international, paid off/ low debt home, hold.
But if it destroys your life if the price went 30% lower for 3-4 years (downside) -> diversify till you are comfortable.
When to sell - on next vest to minimize cap gain or select lots >1 ye that has lowest cap gain.
IMO 30% of one's net worth is still WAY too high. The unexpected can happen even to very prominent companies ... fraud (Enron), mismanagement (GE), the list goes on.
I never let any individual stock become even 10% of my overall net worth. Your milage may vary.
Chief
I would sell it and buy a diverse portfolio.
I cannot make specific investment decisions for you, but I can tell you this—experienced investors typically approach such situations with a structured mindset, rather than simply “selling everything” or “holding on for dear life.”
hard to say since there’s not much diversification benefit if you switch to mkt idx and it’s pretty obvious if google were to decline. google itself is diversified in many business arms and investments. unlike other faang, google is probably the least risky on its own
Other than YouTube , search and cloud where else are they generating revenue from ? BRK is many businesses , Google is not lol