Eric, I'll front you the $cash
James - thanks for your offer. Although I've been studying how to be an analyst for quite some time now, I still don't think I've got it. Take Thomas Bock's call last week on QXL.com - you see, I understand his logic:
"Because QXL.com will have as many customers as Ebay, QXL.com's market valuation should be the same as Ebay's - therefore, QXL.com's price should go up tenfold to match Ebay."
While I understand this logic, my problem is that I'm inclined to expand on this logic to reflect reality. Had I been the analyst who had made the QXL.com call last week, I would have added something like the following to the analysis above:
"And once QXL.com's stock price goes up tenfold, it's price will fluctuate just like Ebay's - doubling, then getting cut by 1/2 to 2/3 every other month - this will allow insiders to make millions if not billions by selling out at the earliest possible time - all the while we analysts will encourage individual investors to buy and hold for the long term - and in the long term, QXL.com's stock price will decrease tenfold, back to where it is today, causing many individual investors to lose large portions of their net worth. You see, stocks like QXL.com serve as vehicles for transferring wealth from hapless, unknowing individual investors to those in the know (VCs, investment banks, internet company insiders, etc.) - it's a sort of economic evolutionary process that's going on - it ensures that people that are gullible enough to believe analysts like me never make enough money to ensure an easy life for themselves or their descendents."
As soon as I can learn to get rid of this logical extension when doing analysis, I think I'll be ready for the big time on Wall Street.
-Eric |
