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Technology Stocks : Amazon.com, Inc. (AMZN)

AMZN 247.35

+0.4%

Jan 9 3:59 PM EST

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To: George Gotch who wrote (48270)	3/31/1999 12:02:00 PM
From: Rob S.	Read Replies (1) of 164684

I agree. But many short sellers have lost their shirts, which are now on the backs of those crazy, maybe in some cases ignorant Internet investor nuts. They say investing is "zero sum gain" but for now the minus sign is in the pockets of the short sellers. Until the bubble finally bursts all the logic and valuation arguments in the world won't mean much. And as long as the Internet, which is less than 1% of total commerce, grows up a bit the dramatic change in our economy and social structure will cause "irrational exuberance".(projected to be from 20% to 50% of commerce transactions within 10 years; even though most of that will be business to business). These stocks will be volatile as they move up. At some point the initial phase of growth will taper off. My guess is that won't start to happen until early next year as the market for Internet on existing PCs reaches a high absorption rate (60-70%). At that time, the growth of new PC and other Internet connections will remain rapid but the overall growth of Internet use will start to decline from the tremendous rates we are now experiencing. I think that the current explosion to the upside for Amazon is caused by their ability to "reframe" the public's thinking about what they are. We know have to think of them not only as a competitor against Barnes and Noble but also against eBay and Yahoo! Does this mean they are going to become a highly profitable company? Of course not. The profits from their auction site will be hard pressed to generate much, if any profits in the foreseeable future. What this does do is expand the balloon one more time, further putting off the time when that bubble might burst or become deflated. I still expect Amazon to move down this summer, although I will have to rethink my expectation that it will see the 60-70 level. There is now increased argument that a substantial support level will be at 95-110.

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