blue scores major # of JOSEF points
steve harmon agrees with blue several days late and after the fact....steve try getting this before it happens next time like blue did!
netstock! by steve harmon
ceo of e-harmon.com
the source for internet investing'
Correction Direction?
A couple of things seem to be aligning to perhaps trigger a 10% to 25%
pullback in the Internet stock sector before year end. We issued a similar
warning this past March just before the April pullback. Surprising coming
from long-term investors (we don't short).
Why could a correction happen?
1) Huge run ups sectorwide, an 'all ships rising with the tide' move that
has indiscriminately raised expectations too high we believe. Ships should
rise but not life rafts. Example: Yes, I am a believer in Akamai (AKAM) the
company but not AKAM the instant gorilla (market cap seems way ahead of
itself). Ditto for DSL stocks and B2B stocks of all flavors. The market was
there in April and it appears could be there again. Then, as now, we issued
a warning beforehand.
2) The piling in of attention-deficit disorder caffeine cowboys into thin
floats, looking for a quick return, squeezing themselves. This is the modern
equivalent of a throng of hippies piling their way into a 1967 VW Bug after
too much Hendrix.
3) Economic growth outpacing Alan Greenspan's abacus (it only counts so
high)
4) Chicken Little and the Y2K chicken soup for the soul being served up and
the fear that a Y2K event could trigger a tech-stock backlash.
5) Too many weak IPOs diluting the Internet
6) The hype coming from more than a few companies regarding what they
represent makes Zapata look like its fax-it-in bid for Excite last year was
conservative.
On the plus side, ponder that we believe this short-term correction (if it
occurs) doesn't represent the underlying value of the Internet. The
intrinsic value grows as a primary driver of value and not a result of a
window on Wall Street.
The fundamental value of the Internet for long-term investors such as
ourselves comes from a new observation: the Internet as utility and
everything that implies.
Utility in commerce, content, communications.
Corrections will come and go, utility builds on itself.
ps
eharmon.com email is coming before it shows up in si |
