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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: Bill Cotter who wrote (73131)	1/9/2000 11:44:00 PM
From: Brian Moore	Read Replies (2) \| Respond to of 132070

Bill, Interesting article. I agree with the facts, but not the interpretation. Today companies are having IPO's at an earlier stage. This makes investing in them riskier. Venture capitalists used to take this risk and accepted it knowing that the companies that did succeed would provide dramatic profits that would offset their results from companies that didn't make it. So yes, Value America is having a hard time making it. But I wouldn't go so far as to call it fraud. IMO, Value America and other new companies that have yet to establish a history of years of success and profits carry more risk than IBM, but also offer the potential of dramatic gains if they become very successful companies. The real question is whether an investor believes the internet is a dramatic change. Some Internet companies will fail. The problem I have with Barrons and the "Big Kahuna" people is they talk like all the internet companies will fail. Every time I hear someone say that many internet companies are not making profits I wonder, don't these people understand that new businesses commonly do not make a profit in their first years of operation? Virtually every internet company is new. Of course many are not making profits. If we used this as a test, we could go back to the start of many (most?) of the companies now listed on the NYSE and say that at their start they were just terrible, foolish investments. Apparently Barrons advocates sticking with a conservative portfolio of long established companies that show reasonable profits and promise, and will likely produce 9% returns each year. Fine. I just happen to believe the internet will (and already has to some extent) result in a vast new set of companies. I'm willing to make speculative investments in hopes of attaining better returns. Also, I've read Barrons from time to time and I think their analysis is just horrible. On Amazon, they said people will still want to go into bookstores to touch the books and look before buying. Sure, that's true sometimes. But Amazon offers a vast inventory that even the superstores can't match. And I've found that if I'm looking for a book on growing roses, or using UNIX, the customer reviews are incredibly valuable. I can find hundreds of books on roses or UNIX and by using the customer reviews (most of which are excellent) I can purchase the two very best books on my topic. I simply can't do that at the book superstore. Amazon doesn't just sell books. They have a computer database of additional information about the books. This is extremely valuable and it's something a plain bookstore doesn't have. Also, for any book I like, Amazon shows me a list -- "People who bought this book also bought...." Book superstores don't provide these recommendations. Small, specialty bookstores run by incredibly good people do, but how often do you find stores like that? Yet Barrons never mentions things like this. They are clueless at reporting the unique advantages that often make Amazon the only place I would consider shopping for a book. They remind me of those CEO's who have their secretary print out their email and then dictate replies. Soooo out of touch. Soooo unaware of what the internet is, what it offers and what it will become.