Fred,
How can Internet company trade at much higher prices then other profitable stocks? Well, here is what I tell my friends: Couple months ago I found out that Compaq has $30 profit on one sold unit. If they receive one phone call from a customer the whole profit is gone. Now, I by PC every 3-4years, so I give them $10/year. How much do I spend on Internet sites a year? About $300-$1,000 excluding fees for trades or $4,000 plus including trade fees. And I have not even start to use Internet seriously plus I'm advanced user so others will follow soon.
Another example: on my recent trip to SF I did all reservations on the net (air, hotel, car) and loved it. This week I'm going to SF, then Boston and Jamaica. Since travel sites are not yet "there" I did some of my bookings via agent but it's only question of time before those sites are better then going though an agent.
I'm currently involved in new 3D web pages, which will start to show up within next couple of months. In summary the picture has magazine quality and the dynamics are TV commercial like!
Based on the above I almost liquidated my DELL, COMPAQ, etc. positions and added to my Internet stocks. That was couple of weeks ago and I gain almost 30% since. By the way I also bought KLB last week for $4 and it's trading around $20 today, expect the same and larger gain to happen to FNTN. One more thing about Internet stocks I learned - sell fast when the price goes sharply down, re-buy later and re-evaluate often.
Radim |
