One person's opinion....
Internet related stocks are extremely difficult for even the most experienced business-people to understand. The concepts are so foreign to what has been driving Wall Street for a century. There is little basis for accurate knowledge.
The "new" investor sees two opportunities. First, a longterm potential akin to the beginnings of WalMart, Home Depot, Microsoft, etc. A shortterm potential to profit by trading, because of the incredible swings.
I actually think the swings are due to large scale institutional buying and selling. I think they invest in, speculatively, and then try to apply their traditional formulas, to determine when to sell, and profit.
Then they get confused when the stocks continue to grow in value.
This confusion leads to perpetuating the swings.
I think the new investor chooses the stock because of some knowledge of what the internet related issues will be, 10 years from now, and trades opportunisticly for a profit.
But, If the stock goes down, there is no mad rush to bail, because the original design was longterm to begin.
Yahoo started in a Stanford dorm.
It could survive, back in the dorm.
I have friends who started ISP's in their garage with 14.4 and 28.8 Modems connected in racks.
These same iSP's could be run from the garage, again, if necessary.
It's going to be an interesting five years, and next 30 days.
I've predicted a 10,000 dow jones by Dec 31st since last year.
We'll see. |
