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Technology Stocks : America On-Line (AOL)
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To: Steeny who wrote (14965)5/5/1999 3:40:00 PM
From: Lee Martin  Read Replies (1) of 41369
 
Steeny,
The part of the equation they are not considering is revenue and earnings GROWTH. Most inet stocks are growing at several x the rate of PC and software stocks. As long as the growth keeps accelerating they will be able to support PE's that are some multiple of the more mature techs.

The reason I'm worried about all the broadband talk is that there seems to be a perception by some that T/ATHM is going to take away all of AOL's customers. While I don't believe this to be the case, if it were true AOL's growth would slow and therefore it's PE would drop.
Because stocks trade on perception and not reality, not having a broadband strategy in place is giving the bears the ammo they need to take down AOL. The perception of higher interest rates is taking down all high PE stocks. So AOL is getting hit from all sides now.

When the sellers finish selling all their shares, AOl will pop back up, the shorts will cover and we'll be fine. Everybody talks about how great Buffett is and I agree, but he makes mistakes all the time. When he sold all of his shares of McDonald's it put in a bottom and never looked back. These fund manager's selling AOL are not as bright as Warren. If you believe in the net you've got to be long the bellwhether unless you're good enough to trade it which most investors are not.
Regards,Lee
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