Some internet stocks are in favor because it is an unknown frontier...by
that I mean that the potential is huge if you let your imagination go
wild
dave,
Imagination is a great thing, but it in no way translates into eps, the underlying buttress for any stock, even the internet plays. IMHO, the next MSFT will be MSFT. When MSFT entered their sector, there was no competition for them. The same certainly cannot be said now. The argument of "the next MSFT" surely has a lot to do with the insane prices we see in the net plays, but IMO they are ungrounded fantasies.
We should see these net plays fall back to earth once the realization sets in that the net is the ultimate discount store, and profits will be difficult to come by on this new medium. I recently bought a camera(the Canon Elph) for $269 on the net. In any store I go to, the cheapest price is $300. They're going to have to sell a he** of a lot of cameras to make real money. Even the "established" net plays like AOL really have not made any $$, most of it has been through creative bookkeeping.
BTW, I love the net, just not as an investment at this point. Maybe after YHOO falls to $5 I'll step up to the plate. It's PSR is 58!!! It's market cap is 3X that of Lam Research and Yahoo has only $49M in sales vs. Lam's ~$1B. Something is out of whack here. And IMO the problem is only exacerbated when you have "expert" analysts like those at ML actually recommending people buy this stock. If they were doctors, they'd be sued for malpractice!
Regards,
Brian |
