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Technology Stocks : America On-Line: will it survive ...?
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To: steve lipson who wrote (6910)1/20/1998 11:47:00 PM
From: PeterBurgess  Read Replies (2) of 13594
 
Montgomery Sec lowered q2 earnings estimates today from .21 to .15 (close to a 1/3 drop) due to high expenses in rounding up new subsribers. Strangely, the yearly earning estimates were left unchanged. MS has a HOLD on the stock.

Oh, I read the MF book and became a believer in PEG stat (I don't believe that the short term future earnings forcast have much accuracy, but that it does have a psychological and behavior impact). So a PEG of 1.00 is fair value; less than 1.00 is a bargain;
AOL PEG = 4.4 (MS '98 estimates) which must be duh? (a) BUY (b) HOLD (c) SHORT?

What I love about investing is the clash of rational-systematic analysis/behavior with the emotional-psychologoical-religous analysis/behavior.

I hate AOL (it's probably a religious issue for techies). AOL is an overvalued-story stock. The future is cable-modems and ASDL modems and even RBOC ISP commodity access to the WEB. Why should anyone mess with AOL expense and slow access? Oh, but why did my father (owner of 3 generations of pcs) just sign up? Why haven't I made mega-bucks shorting this crappy stock?

There is just lots of confusion about AOL and the future to the WEB.
Ok, let's get practical and make some $$$. LT this puppy is a real techo-dog and WS dog (though, not necessarily positively correlated
), and ST volatility is going to provide opportunities for traders to buy and short and win$$$. What's the peak short term value
for AOL? when to switch from long to short? when do earning get announced?
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