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Technology Stocks : Internet Analysis - Discussion

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To: BGR who wrote (135)	2/8/1999 12:30:00 PM
From: Reginald Middleton	Read Replies (2) of 419

<That is what academicians try to capture by the volatility or standard deviation.> That is my point. Every time someone mentions this, I think of a roomful of Nobel Laureate, ivy league university professors with a collective IQ of well over 600 losing nearly all of thier money because they relied on text book theory more than real world application. I bet LTCM can tell us about how real world risks tend to diverge from historical volatility measures. Before anybody mentions it, I know the boo boo was overleveraging, but they overleveraged with the false assumtion of adequate risk controls based on historical yield curve figures. The same loses are occuring now when the old fundamentalists are refusing to understand the concept of leverage and thin floats in Internet stocks. They are blinded by the text book. Do you really think Ebay would be over $200 per share, or 16 billion whatever dollars in valuation if they floated 50 million shares or 90% of the stock instead of a single digit percent? Ebay valuation has little to do with its value and lot to do with its price. Nuff ranting...

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