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Technology Stocks : I-Link Inc (ILNK), VoIP Telephony -- Ignore unavailable to you. Want to Upgrade?

To: Paul K who wrote (380)	4/24/2000 11:08:00 PM
From: Paul K	Read Replies (1) \| Respond to of 417

ILNK: The Importance of Disruptive Technology and Lower Prices(5) by: Glotech (49/M) 4/24/00 6:03 am Msg: 26975 of 27072 5. Qualcomm, with its CDMA technology is another classic example of disruptive technology that lets customers do more for less. Even though Qualcomm's technology was superior, the worlds leading wireless companies, giants like AT&T and Ericsson, had adopted other wireless standards, whose patents they already owned. They attacked CDMA by every means available? Ericsson even sued Qualcomm. The skepticism on Wall Street about CDMA was very strong. But as you can see, Qualcomm's technology was superior, because they were able to offer more bandwidth, at a lower price. So you know, just because of that simple fact, that eventually Qualcomm's technology would have to be used by the others and it was only a matter of time. Today, these stocks are very expensive and also raise the question: "Are they safe to buy now." For example, America Online, the so-called blue-chip Internet Company, trades at over 400 times earnings. In the past, stocks generally traded at small multiples, between 10 and 15 times earnings. So the question is: "Can you safely buy stocks like AOL when they're still growing, when their earnings have not yet reached mature levels? Well? it depends. I think you'll agree that AOL, as an example, isn't the blue-chip stock that Wall Street makes it out to be. On the other hand, I've had good success buying relatively inexpensive ultra high-growth stocks early in their life cycles. But I only buy such stocks if they meet my three criteria for hyper-growth. A hyper-growth stock is the kind of investment that breaks all of the rules as it steals market-share from established companies-just like the great entrepreneurs in American history. It's in these stocks where the greatest opportunity lies. To find hyper-growth companies, look for these three traits: 1. The company should be using or creating a "disruptive" (or revolutionary) new technology. 2. The company should be able to deliver vastly "lower prices" to consumers. 3. The company should be able to maintain a healthy "suspicion" in the market (and especially on Wall Street) that its success is illusionary. Even a cursory look at AOL, will show you that it doesn't meet these criteria. First, there's nothing truly disruptive about dial-up Internet Access. Lots of companies offer such services now, including cable and DSL services that offer much faster connections. Next, AOL isn't cheaper than its competition in fact, several firms offer free Internet Access now. And finally, there's no suspicion left about AOL-it's Wall Street's investment choice for an Internet stock. While everyone has heard about AOL, most people don't know about the hyper-growth companies that I'm buying now. These are the companies that are using or creating the technology behind the growth in communications and fast Internet Access. I'm talking about the companies that are building the new communications superhighway-and the cars and the engines that make it work. Now, to make sure you understand my method for stock picking, I am going to ask you to read again about three stocks that you might recognize, stocks that were hyper-growth stocks in the past. I'll also show you three other stocks that didn't follow the criteria for hyper-growth. And then, once you can tell the difference yourself, I'm going to share with you the newest opportunity I've found. So, here we go? three winners from the past: Nucor, Dell and Amazon? and the three losers: Bethlehem Steel, Compaq and Broders. Do you think you've got it now and can tell a winner from a loser? Let's see? continued....... Glotech