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To: 10K a day who wrote (70094)	7/27/1999 6:11:00 PM
From: Eric Wells	Respond to of 164684

>>Why the recent sales and change from a long term investor. You may be correct, I may be unjustifiably nervous about current market conditions. My nervousness about the market for the next six months is due to the following: 1. Near certainty of further interest rate increases 2. Y2K fears 3. Strong dollar - money leaving the US Combine the above with the fact that stocks are still near their all time highs - well, it makes me think there is a greater chance that the market will head down rather than up. I'm not predicting a crash - and I'm not stocking up on food in fear of a global economic meltdown. But if I had to place a bet, I would bet that stocks will be 20% lower by Jan 1, 2000, rather than 20% higher. I also strongly believe that internet stocks will continue to decline. To date, fundamental aspects (such as plans for profits) of a business strategy have had little impact on the prices of internet stocks. When Jeff Bezos makes statements along the lines of "we're not concerned about profits now..." it makes me think of an operator of a pyramid scheme saying "don't worry about it now..." when questioned on how long the scheme can possibly last. I've always believed that there is no such thing as "easy money" - except of course for recipients of large inheritances and lottery winners - of which I am neither. And it just seems that there is some basic economic principle that is out of whack when you have 20-something junior product managers, fresh out of college, working at unprofitable Silicon Valley internet firms and finding themselves suddenly millionaires because they happened to have accepted the right stock option package 18 months prior. Perhaps, I'm just bitter for not having sent my resume to Yahoo or Amazon 4 years ago (but of course, perhaps they may not have offered me a job). I may be naive - but I like to believe that markets work - that markets forces do eventually unveil the truth. I also believe that when evaluated on their fundamentals, many internet firms have stock prices that are too high. No one knows how the business landscape on the internet is going to develop in the future - but the assumption is that those internet firms that arrive first will do best. But my own view is that the very nature of the internet removes much of the benenfit gained from being a first mover - web real estate is cheap, customer switching costs are low, and the winner is likely to be the competitor that has some combination of the best price and the most recognizable brand. I believe that the high stock prices of many internet firms are somewhat based on this notion that these firms will reap huge benefits from being first. And it seems that it is very easy for people to be very optimistic about a very uncertain future business landscape - but this optimism is borne out of the desire to reap huge profits from inflated stock prices. Anyway, I could go on and on. In summary, I believe that there is a greater chance that stock prices will be lower, rather than higher, over the next six months. As such, I don't want to own stocks. I may be wrong - it's the risk I take. I feel more comfortable with this risk than risking my money on owning some of these stocks. Thanks, -Eric