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Technology Stocks : Amazon.com, Inc. (AMZN)
AMZN 226.19-1.8%Dec 12 9:30 AM EST
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To: Lizzie Tudor who wrote (83739)11/9/1999 8:53:00 PM
From: Eric Wells  Read Replies (2) of 164684
 
Lizzy - thanks for the info. I agree that b2b will have a significant impact on the market. But there is a lot of uncertainty regarding how, and by which companies. And in our current market, investors appear to approach uncertainty by investing in and driving up the prices of everything in a hot sector. Valid arguments can be made on both sides as to whether this is healthy for the industry and the economy as a whole. And whether investing in these companies represents a profitable investment strategy.

I can see two possible explanations for CMRC doubling in one week:

1. New information was made available to investors (or investors came to a new understanding of existing information) that made them re-evaluate the future prospects of CMRC and adjust the price accordingly.

2. CMRC is being used as an instrument of speculation - where investors buy on momentum, causing the stock to go higher, with the hope that they will be able to sell the stock to a greater fool before it falls. It's possible that a small float and the questionable practices of market makers help to exacerbate this. Some might call this a form of gambling.

CMRC's enormous price inflation over the past two months may actually be due to some combination of the two factors above.

I can't help but feel that with many of these b2b stocks (as well as the internet and infrastructure stocks) that everyone is looking for the next MSFT or INTC. The only problem is that I don't think the market can support hundreds of next MSFTs and INTCs - that many of these stocks are going to fall disastrously (I don't know if CMRC will be one of them or not). And some people, perhaps many people, will lose large sums of money when they do.

Thanks,
-Eric
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