"Making a Million in Internets - Part II" In part one we talked about how the media can move a market. This is something one always must remember in internets. Because of the lack of knowledge about internets people often sell when they should be buying or the other way around.
Did you do your homework? If you did your homework you studied a chart of AOL, CMGI,GNET and YHOO. If you look at these charts one thing you might notice is these charts mimic each other in the many up and down swings. The most important thing to notice is there is piece of mind in those charts unlike most tech stocks. FACT: if you had bought each time they got slammed you would have made some serious money, PERIOD that simple.
Certain internet stocks ALWAYS return to old highs, ALWAYS. This will happen for as long as the market remains bullish. So when GNET finally took a breather on Friday I said, bid deal, the high is 142, I'll get there again. When GNET's last earnings came out I got in on some more shares at 50 because the company was making money for the first time and I had profits from a bullet I wanted to invest. Within no time GNET went to 30+, I didn't sell, I posted all over this board it was time to buy, I bought more in the mid 30s. Well, Web21 (www.hot100.com) became part of GNET, many investors figured out who GNET was, a target of 125 then 165 was set, the stock traded in millions for several days and you still aint seen nothing yet. How could I have faith while watching GNET drop like a rock? Simple.
Rule 2 of internets, "Any internet with profits, will always return to an old high". Now this may one day change but it is true for now. Add NSOL to your chart, same thing, any internet you like who has earnings. This proves it is not the business you are in (eg IAP, ISP etc.) but he who is often top in their field and ALWAYS has earnings, in the black or green as it may be. Lets take a brief look at them.
AOL= IAP, ICP,ISP,IRO, no. 1 busiest internet tech site, growing revs, growing advertising dollars, growing page views, increasing earnings, the company makes money.
CMGI, Internet incubator, owns chunks of several good internet companies. Increasing revs, increasing earnings, the company is making money.
GNET= Web communities, ISP,ICP,IRO owns SI and www.hot100.com. 13th busiest internet tech site. Growing revs, advertising dollars, the company is making money.
YHOO = ICP,ISP,IRO no. 2 busiest internet tech site, growing revs, growing advertising dollars, growing page views, increasing earnings, the company is making money.
I could go on but the point is if you were going to build a house you would have a good foundation. If you want to make a million in internet stocks why not start with stocks that always returns to old highs?
Remember this only works with internet stocks making money. There are many smaller companies that have hit a high that they haven't seen again, these companies all seem to have one thing in common. Earnings bummers, one way or the other.
Why has CNBC's experts stated on the air countless times that internets don't have profits? Same reason their portfolios are not up several hundred percent YTD.
With AOL, CMGI, etc. taking a hit and GNET taking a hit (with earnings this close), these are what you call buying ops if you believe the market will stay positive.
Main Points: The media often pushes stock prices, esp.with hype or by giving bad information (eg "internets don't have earnings"). Internets with earnings always return to old highs.
Homework: Write down your vision of what the internet will be like two years from now. Write down what AOL (no 1) and YHOO (no 2) have in common as far as the services/information they provide. BLUE
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