Don,
I hate internet stocks since they are purely driven up by momentum players, MM manipulation (short squeezing etc). And it's ridiculous to believe that they are safe havens since they are being traded at astronamically high PS, PE (PE at several thousand is a piece of cake for these issues, even with PE growth ratio much higher than 1 (do anyone really have a clue of their growth rate in the next five years?)...However, I did trade YHOO! and AMZN in the long side several times. Usually I was in these issues for less than an hour for a nice 3 or 4 point gain (why not take advantage of MM manipulation)? I won't short these stocks because there are no rationale behind most of these issues (I think that SEEk, LCOS etc are really trash stocks).
However, I do believe that YHOO! is one of the rare exception among these issues. It has a great future.
EGRP, I believe is really fully valued. Sure there are lots of shorts out there who don't believe in the story. However, I believe that when all dusts are settled, EGRP will be a big winner. I can see it triple its current value by 2000 if they maintain its current growth rate. I will take a P/E at 50 using current FY EPS estimate, which should give it a $33 value...I don't understand the shorts...there are so many ridiculous overvalued issues out there. I mean, I can list hundreds of better shorts than EGRP.
Although I mainly pursue growth stocks, I always choose issues with PE/growth ratio well below 1 (and of course, not those that miss quarters). Right now the market is insane. No one really cares about valuation since the stock will go up tomorrow anyway. However, when the market is overvalued, it can remain that way for quite some time...until babyboomers have no more money to pump into the market.
good luck,
larry |
