To: LarryCPA who wrote (15513 ) 1/6/2000 2:26:00 PM From: SOROS Read Replies (4) | Respond to
I think you are right. I just worry that the perception of Internet companies is slowly changing, and CMGI, too, has a connection with internet-related IPOs -- when you say "Internet", many think of CMGI along with YHOO, AOL, EBAY, AMZN, etc. I did not check the actual figures, but someone posted a chart showing the income from 3 or 4 top Internet companies (YHOO, etc.) and compared these with about 10 major companies that have a real presence and have just added an Internet component. The upshot of the whole thing was something like you could buy all the major companies and have 20 billion left over to put in the bank to earn interest, and it would take something like 40 years with the Internet companies growing at 20-30% every year while the major companies only grew at 2-4% in order for the earnings to catch up to these major companies. When I look at CMGI's chart (and some other Internets) from Nov. on, it just seems they are so richly valued so quickly, that with the Nasdaq up 85%+ in 1999 and the average return over the last few years at like 30%+, it would not be inconceivable to actually have a DOWN year (perhaps major down for Internet-related companies). The risk/reward was too great for me at this point. It was very attractive in November, but the downside seems too great for me at this point. I have moved totally into QCOM (I know, richly valued, but unlike Internet-based companies, their revenues should skyrocket even if Interent goes flat) and cash. I will wait for another 50% Internet correction before coming back in on CMGI, AOL, YHOO. It may not happen, but the odds are just as great as not right now with them having soared so much so fast again.
