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Non-Tech : E*Trade (NYSE:ET) -- Ignore unavailable to you. Want to Upgrade?

To: Green Receipt who wrote (8421)	9/12/1999 5:00:00 PM
From: ecommerceman	Respond to of 13953

From the Internet Financial Connection. This doesn't mention ETrade specifically, but it does--because ETrade depends on internet stocks so strongly--still have strong implications for the future of EGRP... Internet Fund Manager Sees Strong 4th Quarter siliconinvestor.com Mark Johnson, editor of the Internet Financial Connection, provides the following interview with Alexander Cheung of the Monument Internet Fund monumentfunds.com (MFITX) (888-420-9950). AudioInvestor.com provides an audio version of the interview. Click the link below theaudioinvestor.com if you would prefer to listen to the interview. Below is the write-up. Alexander Cheung of the Monument Internet Fund (MIF) does not view the Internet sector as a technology sector. He views the Internet as the most efficient and cost effective medium of information exchange. "We expect the Internet to be the primary carrier of all kinds of transactions in the future," he says. Alex is focused on long term growth and looks for growth at a reasonable price. As for his investing philosophy, he goes for high, long-term growth, but is patient to wait for good prices. He uses a top down and bottom up approach to find investments. Cheung trys to find the top industries or regions that will outperform the market during the next several years and then finds the best and brightest companies in those areas. So far this year, the MIF is up 90%. I asked Cheung if the Internet shares were over valued and what led to the correction in that area over the last several months. He pointed out that the sector had made a tremendous run from the last October into the first few months of this year. "We have never seen such intensity and such percentage increases in any industry in such a short period of time. There was a huge run in those stocks... It was clearly not sustainable." One reason why there was such a dramatic increase in the Internet stocks in the last quarter of 98' was simply because there was no supply of Internet companies out there. A lot of money was chasing just a handful of stocks. Since the beginning of this year, there has been about 170 Internet IPOs, which added to the supply of Internet related equities. That shifted the attention of only a handful of Internet companies to several hundred. There is also a seasonal slowdown in Internet usage during the summer months, which has not helped the Internet sector. Alex expects many more consolidations to happen in the Internet arena. He uses the example that there are currently more than 5,000 Internet service providers (ISP) in the U.S. and many are not economical. There is a tremendous amount of fixed costs and over time we should see the number of ISP's go down to 200 or less during the next five to ten years. As mentioned above, Alex believes that the Internet will be the leading carrier of transactions. Many dot com companies, he feels, will grow into "bigger dot companies" and move into different sectors of the market. Amazon.com for instance is not only a book retailer but sells CD's and will soon sell automobiles on the web. Many people are expecting a strong holiday season in the fourth quarter of this year, Alex agrees. He points out that recent surveys indicate people that have purchased goods online in the past plan to purchase more this year. "People that have not bought anything online before will go online and make first time purchases during the holiday season... We do expect a strong fourth quarter." He expects companies like Amazon.com (AMZN 63 5/8) and Ebay (EBAY 144 1/2) to post strong results this holiday season. Cheung's favorite holdings in his Monument Internet Fund are; America Online (AOL 96 1/4), Broadvision (BVSN 106 1/2), Broadcom (BRCM 125 3/8), CMGI Inc. (CMGI 87 3/8), RealNetworks (RNWK 88 1/2) and Yahoo! (YHOO 162 5/8). The MIF has been putting more emphasis on the services sector recently. Cheung says, the services sector is underrated because it is not sexy. As more businesses gear up to do business online, the services sector should do extremely well. "It is a unique sector and traditional companies that are not online do not have the expertise or management skill to go online and must rely on outside help." One company he likes and thinks will benefit from the outsourcing trend is USWeb (USWB 28 1/8). One of the most important trends Alex sees is the expansion of bandwidth across the Internet. "There will be tremendous growth in broadband access. It will allow people to access the Internet at a much quicker rate. A 56k modem does not allow many Internet users to surf the web at a favorable rate, that it is commonly referred to as the World Wide Wait, rather than the World Wide Web. We expect broadband access to grow tremendously over the next three to five years. With broadband access becoming more common, we will see an era of multimedia. We will be able to see streaming video, video on demand, video conferencing and all that coming into play." As the Internet economy moves foreword, Cheung believes that the Internet will be the primary carrier of transactions and a significant portion of the GDP to be conducted through it. He adds that there will be an explosion of Internet users outside of the United States. "This sector is still very small and is growing at a tremendous pace. The best way to approach the Internet is to have a portfolio of stocks and invest money that you are willing keep in the area for at least five years. If you do that, you will be well rewarded."