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Non-Tech : NetBank(NTBK)-formerly Atlanta Internet Bank
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To: AugustWest who wrote (1588)4/17/1999 10:47:00 AM
From: George Gotch  Read Replies (1) of 2414
 
As you know, the whole net frenzy is based on the assumption of a brave new world. Of course analyst have supported this assumption which I can understand due to the firms they work for are making tons of money with underwriting and venture capital funding. The success of this or others, is pretty much down to perception of the investment public, hype or whatever you call it. This is why AMZN is upgraded to some wild number by DLJ. They just make an assumption that it is a "new economy" and valuation models have changed. Even though making money is pushed out further and further for these firms, it is justified due to some "name brand" premium they will realize in the future. Of course this perception of "new valuation models" is based on an old perception of brand name and success in the market place. Unfortunately, they don't discuss the whole story in that the net will reduce profit margins and price premiums by ease of entry and economies of scale. In conclusion, I guess it is perception momentum investing. Whatever the herd wants to take up, you jump on and ride it knowing at any moment it can all come crashing down. Remember, If these companies don't have to show income, immediate sales, or any relativity to time value of money pricing scheme, then the only thing that moves them lower is a perception change.
Happy Trading

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