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Technology Stocks : America On-Line (AOL)
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To: stock_bull69 who wrote (1662)1/6/1999 2:59:00 PM
From: Chuzzlewit  Read Replies (2) of 41369
 
Steve, I didn't say that AOL is overvalued. The valuation models are terrible because there is so much supposition that goes into them. The question I posed to the thread is whether my fellow investors are playing a greater fool game, or if the really see the kind of incremental growth that I believe is necessary to sustain these kinds of share prices.

With a company like AMZN I have a simple answer -- no! And it is not because there is an issue about its growth. The issue is with the underlying cash flow which last I looked was negative. The reason is that there is a negative gross margin. So no matter how much they grow they will not achieve positive cash flow unless there is a fundamental change in their cost structure.

TTFN,
CTC
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