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Technology Stocks : Amazon.com, Inc. (AMZN)
AMZN 231.69+1.7%3:59 PM EST
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To: Sam Citron who wrote (19796)10/3/1998 11:39:00 AM
From: Bill Harmond  Read Replies (1) of 164684
 
Sam, David is bullish on Amazon's future. He thinks the company is a winner. The only reason he downgraded it to hold was valuation. We both agree that Amazon is a good business.

Rating changes based on valuation are tricky, particularly when interest rates are declining. Like I posted, he downgraded Yahoo based on valuation last year and missed a further 65% advance in the stock until he reinstated his buy rating a few months later. I'm glad I didn't follow his advice then.

Amazon actually came down to his intrinsic DCF-based value of $60-70 during the September decline. Apparently the market doesn't think it should trade there because that price range lasted just a couple hours.

Amazon bulls share the same problems and circumstances the bears do. We all wish we could see it cheaper! Unfortunately, Mr. Market isn't making it easy, and there are strong institutional hands that don't apparently care about near-term valuation concerns enough to trade it.

Every time I review my portfolio I say to myself, "God this is expensive!" But since I want to participate in Amazon's future I have just two choices: sell it and hope to buy it cheaper, or hold on. As the shorts can attest, option #1 is dicey at best.
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