There's been a whole raft of posts in the 3Dfx thread about internet stocks. There are two stocks that in some ways I wish I'd bought, but I haven't. They're Amazon and Yahoo. That's only because I use both sites so much.
I looked into buying them, but there is so much frenzy around them that I could not justify a purchase unless I followed them closely. Now I'm not saying that they'll all burst and come crashing down. Years ago, I remember similar comments about Microsoft, how it couldn't keep going. The problem is, everyone remembers Microsoft, but they forget all the other tech stocks that crashed during the same time period.
There are many, many IPO's coming to market for internet stocks. Current ones have restricted shares that are coming to market as well. Supply will increase and there's a good chance that momentum will start to slow in the dot coms. As more and more buyers are dragged into the frenzy, I start to wonder who will be left to keep buying the stocks.
The only earnings model that I've seen that makes any sense is a very long term model, where internet speed and ease of use increases until it is the mainstream media. Then the current stocks can be considered media outlets or store chains. The argument goes that by buying the early pioneers now, you can get great potential growth at a very cheap price. My problem is, you have to look increasingly far into the future to get value for the price you're paying today.
My returns on my investments (much of which is through mutual funds in my 401(k)) are sufficient for my goals. I'll let the mutual funds worry about the dot coms, if I start fooling with them, I can lose my focus on what I know and can invest in. I'd rather not be swept into the frenzy and run off a cliff.
Michael
ps - if the net stocks do go down, they'll take more than just them down, so all the people that are hoping it will happen so they can say "told you so" are asking their own stocks to go down as well |
