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Strategies & Market Trends : The New Economy and its Winners -- Ignore unavailable to you. Want to Upgrade?

To: Original Mad Dog who wrote (20)	5/10/2000 7:23:00 PM
From: Bill Harmond	Read Replies (3) \| Respond to of 57684

Diversification is important for stability, but I have a broad list, so I'm not really too worried about blowing up. Like you say, non-technology names would be great right now, though they would have been a major drag for the last three years. I'll settle for focusing in technology (fundamentally the best growth story) and live with the volatility. Until this winter I was a cut-and-run trader. This is my first experience holding through a killer decline, and frankly I hate it emotionally. I does feel at times like I'm strapped to an airplane in a death spin. I rely on professional advice more now than before, and I haven't heard any evidence of repudiation of stocks as an asset class (even technology stocks), or that we're heading into a secular bear market. So I'm following my plan and riding this thru. Not fun, I admit, but it's only criticism with 20/20 hindsight that has any bearing on this situation, and that's useless. The Internet sector has suffered a 50% decline every year, and I have no doubt that we are still in the earliest stage of the Internet's commercial impact. eBay is a great situation, IMO. 87% gross margins, and total sector dominance are linchpins. The rest is execution risk. eBay has been taken apart before, specifically last year when their Sun server (yes, "er") failed because the model eBay uses fails if just one of its processor fails. Not good. Bad planning on eBay's part. But their customers didn't go anywhere. That's key. Now they've spent a fortune building redundancy into their site, and that problem has gone away. There's concern now that auction counts aren't growing as fast. They aren't. IMO, they're trading far fewer Beenie Babies and Pokemon cards. The gross merchandise sales figure is growing nicely, and eBay's franchise still dominates. No one comes close. I think there are transitional issues at work here. The first is that eBay has passed the early-adopter phase, and there is a natural lag involved there. Secondly, the market is using any excuse to sell. They'll be back. Greed will return. What we've witnessed with the B2C Internet space is a small preshow to what's coming with broadband, IMO. The AOL/Yahoo/Amazon/eBay excitement under narrowband is nothing compared to what we will have as these services move into the broadband years ahead. eBay will be 3D and video, and will provide such a compelling virtual experience that more classified advertising dollars will be sucked off the back pages of every newspaper.