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Strategies & Market Trends : A.I.M Users Group Bulletin Board -- Ignore unavailable to you. Want to Upgrade?

To: LemonHead who wrote (8084)	8/6/1999 8:08:00 AM
From: JZGalt	Read Replies (2) \| Respond to of 18928

Keith, TWE is a growth company. Take a look at the recent SEC documents and look at the yr/yr subscriber growth as well as the plans for expansion. You can also contrast the cost of obtaining a subscriber vs. E*Trade. As a last resort look at the amount of trade growth. Not as reliable since it might be seasonal and also depends on stock market levels and investor fears or euphoria. ---- Dave

To: LemonHead who wrote (8084)	8/6/1999 8:30:00 AM
From: OldAIMGuy	Read Replies (1) \| Respond to of 18928

Hi Keith, Good question. It's a bet this time around. I'm betting that their progress, size and commitment are going to carry them to a threshold that will make it one of the premier on-line brokerages. I have had a Waterhouse account for several years. I've used their WebBroker service for what seems like a long time as well. So far, so good. I also used to AIMtrade Waterhouse's stock in the past. This builds some confidence. It's knowing plenty about the way brokerage stocks act that is the first point of decision making. I know they are high BETA right away. I first started trading brokerage stocks nearly 15 years ago. I think the first one was Paine Webber. What is typical of the industry is a long rise (during the Bull phase of the market) followed by very sharp decline (a market scare). The big name brokers fall typically 30%-40% from previous highs while the ones that are heavily retail get clobbered to the tune of 50%-60%. So, it takes deep pockets of Cash Reserve to handle even the mild ones. Now, let's add to that Waterhouse's "Internet" content. They're an unofficial DOTCOM. If we've already seen the end of the DOTCOM era, this could be to their disadvantage. However, it is going to be the continuing source of their growth. I think that with T-D Bank's funding, they will continue to be able to improve their infrastructure and keep it competitive. This is also because they are profitable. T-D might not fund a loser. As the brokerage industry continues to struggle with commission pressures, they will continue to consolidate for efficiency's sake. I think Waterhouse is in a good position to be a part of that consolidation. So, growth may come partly from within and partly through acquisition. Hope this helps, Tom