First post on AOL message board. Other than my mutual funds, I only invest in internet stocks, mostly pennies. AOL is the only NYSE company I own. I find the debate on this board about DSL vs Cable interesting (since wireless is probably the ultimate future of the internet anyway), but it is clearly not the reason AOL is down now. The whole internet sector is down and I view this as necessary and healthy for the sector since they have simply run up too fast over the last 4 months. Internet stocks are heavily shorted and are bought and sold by a lot of day traders, so when they run up, they REALLY run up, and when they correct, they REALLY correct. Its like an exaggerated response both ways. If I was short this stock, I would be getting real nervous about now, especially after the Barron's article.
The internet is the future and AOL is and will be the dominant internet company for the forseeable future. They will be what GM was to cars, what GE was to electronics, and what MSFT was to software. I say this because AOL has one very major thing going for it - BRAND NAME. There are tens of millions of people out there who will be signing up to access the internet over the next few years. Most of these people are VERY computer and internet illiterate. They couldn't tell you what ISP, DSL, or URL stand for to save their lives. The majority of people accessing the internet over the next few years belong to this category. Many of them are buying cheap computers just so they will be able to get on the internet. Even my 69 yo mother is seriously considering buying a cheap PC for one reason, and one reason only, to access the internet. The vast majority of these people are going to go with AOL because that's what their friends use, brand name recognition, and because its very easy to sign up. I've received two AOL CD's in the mail just over the last three weeks offering 100 hours of free internet time. For every 1 person who stops using AOL because they want to use cable there's probably 200 new people signing up with AOL who think that internet connections over telephone lines is just fine and who don't want to pay more than $25/month for internet access. I don't think its unrealistic to believe that AOL will have up to 40-50 million subscribers in the next few years. Add up the numbers and add to it what AOL's revenues will be from e-commerce and its staggering.
AOL is involved with almost every aspect of the internet through their alliances, partnerships, and purchases. You can bet your bottom dollar that this will continue, and if there is legitimate money to be made AOL will be there making their share of it. As to what will happen to AOL's stock price over the next week or so, my guess is as good as anyone's. To me, AOL is THE stock to own for the next ten or fifteen years and maybe even pass on to your kids. I already own about as much as I want, but if AOL dips below 100 I will be buying more. If it goes to 40 as I've seen suggested in one post (probably from a VERY nervous shorter), I'll sell every stock I own and probably half of my mutual funds and load up big time, then retire about a year later.
All this just IMHO.
Happy Mothers Day to all you mothers out there in cyberspace.
Big Easy |
