Well then, here's one more:
>>I've been screaming about valuations in the Internet space being too rich for a long time, and have watched these stocks move higher and higher. The conclusion I've reached: Valuations in the sector are a result of a severe supply and demand imbalance and nothing more. The float, or the number of shares available for trading, cannot keep up with demand, and momentum players sitting in front of their computer screens are taking full advantage by pummeling in the buy orders.
You can try to justify the prices all you want using somewhat sound arguments (i.e. the Internet is a revolutionary phenomenon, the fastest growing mass medium of all time and the pioneers in this space will have numerous advantages over traditional competitors, yada yada yada.)
The fact is, few of the valuations out there make sense to me, given all that could go wrong in the next few years. And it's obvious the fundamentals have very little to do with the recent movements.
Some Internet stocks still seem reasonable, at least on a relative basis, but I'd frankly be paralyzed by all the volatility, unsure if the cheap ones will rise or the expensive ones will fall.
Of course, this leaves a huge dilemma for more cautious, buy-and-hold investors. Not investing in the Internet doesn't seem smart, but many of the probably winners in the space seem way overextended. <<
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