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Technology Stocks : Amazon.com, Inc. (AMZN)
AMZN 232.88-0.8%Nov 17 3:59 PM EST
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To: cellhigh who wrote (2680)4/2/1998 9:25:00 AM
From: William T. Katz  Read Replies (2) of 164684
 
I'm not particularly enjoying this ride, since it is driven entirely by technicals, momentum, and idiots ... just about anything except fundamentals. But of all the internet stocks, AMZN is the most comfortable short because of the (1) competition and (2) the relatively simpler way of valuing this company.

I covered 1/3 my position at 85 but at this time I have no intention to cover the rest of my position. Enjoy the short squeeze and the stock price swings since they clearly have no relationship anymore to fundamentals. But eventually, stock price begins to reflect the fundamentals. Since I'm bearish on the market (correction within a year) I think if you have to be short some stocks, might as well pick the most overvalued hype-driven no-earnings stock out there. I'm still confident that Amazon has an initial lead but now faces the 800 lb. guerillas that will do to them what Microsoft did to Netscape, that other great company that had an "insurmountable" lead in this new internet world. Luckily I didn't bet the farm initially and so I can actually increase my short position up here in nosebleed territory. I might close my AOL short if it breaks 75 because the hype and lack of valuation is worse over there. Yahoo, to me, is the most dangerous short.

It's true that the stock market is just momentum and hype driven now. Not sure whether that is the signal for a major crash within the next year or not. I recently read an article that described the sentiment just before 1929 crash and it reflected what is going on now .. movement entirely to momentum with some wild valuations.
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