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Technology Stocks : Amazon.com, Inc. (AMZN)
AMZN 232.37-0.9%3:59 PM EST
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To: jawd who wrote (8447)7/2/1998 12:30:00 AM
From: William T. Katz  Read Replies (1) of 164684
 
The shorts have been right in one thing: Amazon.com is overvalued. You can claim a lot of things. You can claim the shorts are all stupid for not embracing momentum. You can claim the shorts completely underestimated the possible run-up and eventual top. But you cannot claim that Amazon.com approaches fair valuation at almost 3x Barnes & Noble. Fundamentals still exist. And if you say the price of a stock determines the fundamentals, then I say you are the "joke". So let's be clear about what's happening. The market is always right about the stock price. But the market many times knows little about the true worth of a company. That's why we see hundreds of stocks skyrocket only to crash & burn. Does the real value of the company really change like that? No way.

All this just leads me to believe that momentum is now the main way to play the technology stocks. They are so volatile and in forming sectors like the internet, people can wave their hands and justify anything. At this price, though, going long with a stop market sell just loses money because of the volatility. And removing the stop market sell opens you to the eventual crash. Too bad I still don't have money at E*Trade. I'd be buying puts and calls. It's either going way up or way down from here by the end of the year.
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