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

To: Jack Jagernauth who wrote (8163)	8/12/1999 8:42:00 AM
From: JZGalt	Read Replies (1) \| Respond to of 18928

Jack, My "fair value" calculation only works on a subset of stocks which are either cyclical in nature or exhibit strong growth. They cannot be used to value things like AOL or YHOO which have a great franchise, but as of late are not showing earnings. When I bought TWE at the IPO (sold immediately for small profit), I valued it at $21 per share based on it's relative value to ETrade. I used various measures like volume of trades and number of customers in a rather convoluted formula that really was just pulled out of my butt. Now? Who knows. The only sure thing is TWE and onther online brokers are the future. TWE is lower cost operation than ETrade and Schwab from what I remember so it should have an advantage, but I have qualms about their ability to ramp up and take advantage of their position relative to ETrade. In other words, they are too cheap to spend money now to get new customers which will stay for the rest of their life assuming they don't get screwed over. ETrade is operating on the net model where you spend a ton of money up front to get people signed up to use your service and they in turn tell friends, who tell friends, etc. I'm happy with my Waterhouse accounts, but I do have a ETrade account for some of their features. If I was selecting today, I'm not sure I would have ended up at Waterhouse simply because I hear ETrade on commercials, magazine inserts, deals with airlines, etc. OTOH, I might have run into Tom and got his recommendation and noticed that Waterhouse is cheaper than E*Trade when it comes to the type of trading I do. ---- Dave