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Politics : Ask Michael Burke
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To: Tommaso who wrote (48771)2/24/1999 10:30:00 PM
From: Knighty Tin  Read Replies (4) of 132070
 
T, Huh? <g> I don't think Schwab and E-Trade are really comparable. Schwab has brick and mortar all over the country and bloated commissions. The online business is a small part of the cash flow. Basically, folks who use E-Trade are cheap and aren't experienced enough to be accepted by Brown and Co. for lower commissions. <g> Folks who play at Schwab are really full service broker candidates who hope to use the firm's slim array of services and minor discounts to outperform. In other words, dim bulbs who enjoy paying more for less. I do not count the so-called no load fund investors who either don't realize or don't care that they are paying Schwab a small backend load on the shares they buy.

So, I think Schwab's reputation will be hurt, but they are not a one trick pony. They perform several tricks poorly. E-Trade, as a one trick pony, had a major problem that will probably haunt them for a while if not forever.

In both cases, the valuations vs. the growth is what is stunning. Halfway decent growth in the best of all markets has gotten SCH a pe ratio over 80 times. I don't see the best of all markets continuing. E-Trade has been able to grow losses with some inconsistency, which makes them a poor internut trade vs. an Amazon, which can grow losses to the Moon without half trying.

MB
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