Baidu Inc. (NASDAQ:BIDU) has come to be known as 'China's Google'. That comparison alone tells you that this company is a powerhouse. The sobering point to remember is that China has over 1.3 billion people while the United States has just 313 million. If Google (NASDAQ:GOOGL) has a valuation of $372 billion, why can't BIDU have a valuation 4X greater? Right now BIDU has a market cap of $53 billion. That's the mentality that has driven investors to buy this stock. Anyone betting on best-of-breed in China is betting on BIDU.
Emotionally Driven
That said, considering China's latest economic woes, my bet is that investors can buy BIDU much cheaper than current levels. Indeed, $114 will be the first spot I dip my toes into the buy-BIDU water. The stock is currently sitting at $150.96 per share. Generally speaking, stocks aren't so much a gauge of reality as they are of emotion -- euphoria and fear are the driving forces. With the stock market making a top in this vicinity, fear will soon take over and push a majority of stocks much lower.