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Technology Stocks : America On-Line: will it survive ...?
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To: Zoltan! who wrote (13566)4/28/1999 9:24:00 AM
From: FR1   of 13594
 
Wall Street Journal makes its living off ads from institutional brokers.

Neither of them can stand the idea that something like the internet has come along and disrupted their ability to predict who the winners and losers are by using standard economic calculations. It threatens their reason for existence.

WSJ has consistently been wacko wrong with internet stocks. They were wrong on AOL, AMZN, EBAY, etc., etc.

Interesting to note how carefully they craft their reporting. Your article is a great example:

"Investing in Internet stocks is like playing the lotteries," Federal Reserve Chairman Alan Greenspan told Sen. Ron Wyden of Oregon in January. "Some may succeed, but the vast majority will fail." Yet so far, few investors have failed by buying Internet stocks. And buyers of these stocks will continue to make money as long as they convince the next guy that the stock will be worth more tomorrow than it was yesterday.

I happened to watch that whole January delivery live on cable. It was almost exactly the opposite of what WSJ said.

Greenspan was asked what he thought about the inernet stocks. First, he praised out economic system. He pointed out that the internet was the new frontier and that most of all our commerce will be done on it in the near future. He pointed out that people are investing in the businesses that they feel will be the leaders in this field after the dust settles. Investors, he said, know that the returns today are not great and many internet businesses are even running at a loss but that is what you expect in a new environment like this. He pointed out that what typically happens in an environment like this is that you will soon have rapid consolidation among businesses in the field. He pointed out that the valuations of the stocks are extremely high. Many of the businesses die but some, he said, will go on to earn out those high valuations and do even better. At this point he went into the bit about the lottery. The WSJ took out the scissors and selectively edited Greenspan's comments so it is nothing like what he said. They consistently do this and have now lost the respect they spent so many years building up. The WSJ writers must think we are all idiots and they can twist the truth any way they want.

If anything, Greenspan was encouraging people to invest in internet stocks but saying to be careful and stick with the big guys.
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