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Technology Stocks : America On-Line (AOL)

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To: marko who wrote (30287)9/1/1999 10:33:00 PM
From: Time Traveler  Read Replies (2) of 41369
 
Is AOL's future earning growth as rosy as you pictured it? Not that I have doubt, but after seeing Compaq's episode I am more cautious.

When Compaq was over $50, all analysts and investors brought up all the reasons why that stock would return a great profit in the future. In fact, all analysts were pounding on the table to urge for strong buys. A few weeks after that, the stock halved and still remain less than half of its 52-week high. Does that sound familiar?

We have to think a little differently. When every one is so confident on a stock, he loads up on margin. When this stock runs out of buyers, it tanks. Everybody has to trim his margin. The stock becomes less attractive. Is QCOM in that cycle? What the analysts are saying about AOL is not important (they all say STRONG BUYs). What is important is what the fund managers are thinking. These guys are just like you and I, except they have much deeper wallet. Now, how can we cash in on this. Please advise.
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