Dave,
You mentioned that it would take between 8 to 15 quarters of year-to-year growth in the triple digit area to convince you of a fair valuation. A couple of questions/observations:
1. Are you planning on counting the past three of four quarters in that number? I believe the sequential quarterly growth all year is no less than 30 or 31 for any quarter, which easily yields year-to-year triple digit readings. If you count those, they only have to keep it up until 1st quarter 2000 to make a believer out of you. If not, you're talking 2 to 4 years out from right now.
2. As you know, I share many of your concerns/opinions about YHOO's valuation and what I think we both view as a limited upside from here for some time to come. But I have to ask you, not just in connection with YHOO but any company emerging from the woods and showing early promise: If you have to wait for 8 to 15 quarters of phenomenal growth, are you ever going to get a chance at one of these companies at a low valuation? By then, isn't everybody already on board? My own view is that you might be better off taking high-risk capital and speculating on those which, in your gut instinct opinion or belief, have the best shot at being a home run. You'll be wrong most of the time, but when you're right, it makes up for it. Seems to me that the only other way to make money on these things is to short them, which is itself a high risk proposition as many have discovered, and hope you time it right.
MAD DOG |
