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Technology Stocks : How high will Microsoft fly? -- Ignore unavailable to you. Want to Upgrade?

To: SunSpot who wrote (42361)	4/17/2000 1:29:00 PM
From: Jacob Snyder	Read Replies (1) \| Respond to of 74651

re: first movers advantage: Amazon is an excellent example. They are a first mover. They are doing what no one has done before, and they are doing more of it than anyone else. Great. Now, lets look at how they do it: They have piled up debt, and spent the cash on a lavish advertising campaign. They are selling a variety of commodity products, at below cost. It is not hard to ramp sales rapidly if you do that. But it is hard to ever show a positive Return On Investment. If you try to start a discussion about ROI with AMZN investors, they get bored quickly. That's my point. Sooner or later, AMZN will be valued based on forward 12-month EPS prospects. People are paying for 2010 earnings now, and that is irrational. Since they are in a non-tech low-margin high-volume business, they will be a good investment only if they are the low-cost producer. They have yet to demonstrate that. When Amazon and Walmart go head-to-head, the odds overwhelmingly favor Walmart. AMZN will have no first mover advantage. It's a myth, but investors are paying handsomely for it today.