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Technology Stocks : Net Perceptions, Inc. (NETP) -- Ignore unavailable to you. Want to Upgrade?

To: Sofa Kingdom who wrote (2677)	8/12/2000 12:26:40 PM
From: Carl R.	Read Replies (2) \| Respond to of 2908

Sofa Kingdom, you seem to miss my point, and that is that a bubble is a bubble is a bubble. The tulip bubble, the South Seas bubble, electricity generation in the 1880s, the Biotech bubble, the internet bubble, and various other bubbles you can think of all behaved nearly the same way, and if you graph them the graphs are all nearly identical. Why? It has nothing to do with wooly bears, gene-splicing, or DSL modems and everything to do with the human mind and the way it fluctuates between fear and greed. Early in the cycle it seems that everything goes up, so people keep buying indiscriminately until everything is overvalued. They devise elaborate metrics to justify ever-more outrageous valuations since there is no fundamental than can justify it. In the case of internuts those valuations happened to be growth rates and PSRs, or even number of web-site hits. Later in the cycle some people get vertigo and sell, and there are some vicious corrections, but those who buy the dips are rewarded as the market moves to yet another new high. Eventually it becomes clear that things can't just rise forever, and the market corrects in a more permanent manner. Because the nature of a bubble is overvaluation, you get at first a 50% correction, and then a gradual sorting of the stocks into winners and losers. Losers continue to fall, while winners eventually recover their prior highs over a period of several years. In order for the index to reach its prior highs, however, the winners have to get well beyond their prior highs in order to make up for the losers. Thus the winners may reach their prior high in a couple years, but the index will probably take 5-8 years to recover. Once the bubble has burst, as this one has, the market is safe for investing again, and if you pick wisely you can do very well. I agree with your comments on NETP, which I also believe has a dominant position in their sector. I expect them to gradually move up, and to reach their prior high within 3-4 years, which would provide an excellent return to those investing now. Carl