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Technology Stocks : Amazon.com, Inc. (AMZN) -- Ignore unavailable to you. Want to Upgrade?

To: Eric Wells who wrote (86849)	12/9/1999 2:41:00 PM
From: Bill Harmond	Read Replies (1) \| Respond to of 164685

>>I would argue that there are many stocks in this market that are priced using the same logic Very true. I'm not talking about them. >>And I would claim it is irresponsible of any analyst to ignore the worst and likely case scenarios, and to focus only on the best. Worst and likely? You're stuck.

To: Eric Wells who wrote (86849)	12/9/1999 5:26:00 PM
From: Greater Fool	Read Replies (1) \| Respond to of 164685

Thinking back to the fundamental of fundamentals, discounted cash flows: At a discount rate of 10%, a valuation of $100 billion requires a steady-state cash flow of $10 billion a year. The riskiness of Yahoo would certainly call for higher discount rates, and these cash flows are considerably in the future, not now. Can you or anyone else in their right minds imagine Yahoo with cash flows anywhere approaching $10 billion a year, let alone well beyond it? The valuations I have seen analysts performing tend toward the absurd, calling for, in one instance, operating margins of 85%. Maybe I just don't have a good enough imagination. After all, who am I to argue with the millions of investors trading Yahoo stock? Or is that just an example of the reasoning in "Eat garbage -- a million flies can't be wrong"?