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Pastimes : The Justa & Lars Honors Bob Brinker Investment Club -- Ignore unavailable to you. Want to Upgrade?

To: Allan Harris who wrote (6325)	6/28/1999 3:43:00 PM
From: Justa Werkenstiff	Read Replies (1) \| Respond to of 15132

Alan Re: "The on-air ridicule was directed at holding a stock while it lost 50% of it's value." Let's take a real world example of Jay who you can hear on the replay at 1:45 into the program of June 26th. Jay came on to the program and asked Bob why he did not think the nets would reach new highs and he was ridiculing Bob, implicitly, for bad mouthing the nets. He noted that analysts were predicting AOL would go to $215. Brinker responded by asking how high was up. Was 300x to 400 x earnings at its recent highs too high? Jay came back with the statement "well if p/es don't seem to apply in these suppy and demand matters." Brinker asked Jay if P/Es did not matter and Jay did not respond. Brinker noted that AOL was trading at 200x next years earnings now and that this implied 50% compounded growth forever and ask Jay if he believed it. Jay came back with his "mark my words" predicition that AOL will top $175 in the next two months. Brinker responded by asking Jay what percenatge of AOL was in his portfolio. Answer -- 40%. Now then and only then did Brinker ask if Jay held the shares at $175. Jay said that he did own it then and Brinker said: "And you know, it has taken a tremendous hit and it just sounds to me like you are kinda like in denial like this is a huge hit. I think you're wrong. I don't think the stock will make a new high this year." I heard no ridicule of Jay for holding a stock that declined 50%. I think Brinker was trying to pinpoint where this guy was coming from. The discussion centered on whether AOL would go on to new highs. Jay said yes; Brinker said no. Do you think AOL will hit new highs in two months? Re: "The fact that some Internet stocks are volatile and decline 50% in a couple of months says nothing about opportunities in the sector." Brinker agrees that the sector has promise. It is a question of value. Usually, if you bought a stock at or near its highs that has come off 50% in a matter of weeks it means you paid too much and should at least have a case of dead money if not worse going forward. When a sector goes through that kind of hit, it usually takes a ong time to recover. I guess we will see if the nets are the exception. I think it is interesting that at the end of the month and quarter and first half of the year today -- at least -- the nets are under pressure while the Nasdaq is looking fine. Maybe the institutions are lightening up on the nets. So who is buying? Individuals as Paine Webber noted that 89% of net holders have held or added to their positions during this sector decline. Interesting.