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Technology Stocks : CMGI What is the latest news on this stock?
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To: keta who wrote (4427)1/28/1999 12:35:00 PM
From: SJS   of 19700
 
Here's one take on that:
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GREENSPAN AND INTERNET STOCKS. There has been plenty of talk about what Fed policymakers think of Internet stocks. More than one Fedwatcher has suggested that the Fed sees the Internet stock craze as an indication of excess liquidity that argues for higher interest rates. Today, we finally heard from the Chairman himself. When asked about Internet stocks, Greenspan did note a degree of hype, but he stopped well short of an indictment of the Net craze. He began his Internet comment by noting that "you wouldn't get hype working if there weren't something fundamentally potentially sound under it. The issue really gets to the increasing evidence that a significant part of the distribution of goods and services is going to move from conventional channels into some form of Internet system." That sounds more like an endorsement rather than an indictment. The comment that will likely draw more attention was his warning that because of the Net's huge potential, you have "pie in the sky" potential for many companies, some of which would "undoubtedly" succeed, but the "vast majority" of which "are almost sure to fail." We have two thoughts on Greenspan's Internet view. First, though he is clearly uncomfortable with the valuation of the overall market, he is not that concerned by the Internet sector specifically. Second, he is certainly correct that the vast majority of Internet companies will fail. History tells us that most entrants into a new industry fail, and that will almost certainly be true of the Internet. For every Yahoo! (YHOO), there will probably be thirty Pink Monkeys (PMKY) or ImaginOns (IMON).

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