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Strategies & Market Trends : Ask DrBob -- Ignore unavailable to you. Want to Upgrade?

To: FLACK who wrote (7501)	10/4/2000 4:13:10 AM
From: p40warhawk	Respond to of 100058

Flack Thanks for another good post. If I accepted your premise, I would have to accept your conclusions which were stated so well. I admit that the word "dead" was mine, but you did sound as if you believed the "day of the internet" was over from an investment point of view. Maybe you are thinking in a much shorter time frame than I am. I don't know. You said "The NAS debacle is freeing up gobs of money to move into untarnished companies with real growth. Do you doubt that?" Actually, I think I do doubt that. Not sure which "untarnished" companies you have in mind, but I assume they are not internet companies. I will say that the "NAS debacle" is certainly freeing up gobs of money right now. But, I don't see that money rotating to the Dow or elsewhere right at the moment. I see lots of cash on the sidelines, especially in the institutions, and I am not sure where that cash is going. Short term the money may do just as you predict. But it is equally possible that it will be reinvested in some of these ridiculously low priced internet leaders like cmgi, enga, and bvsn. You said, "Let's take CMGI, a stock that has fallen from 160 to 23 1/4 since March. This stock has had its bubble burst. Is there really any doubt in your mind? What would you call it? A dip?" If I thought the bubble had burst I would be very foolish to remain in the stock. A "dip" is subject to many definitions, I guess. What would you call it if cmgi regains most of its losses since March? You ask, "Now, does this mean that the internet is dead? Of course not! But I think the dream of easy riches in internet stocks has finally given way to reality." See my last post to Mfn on this. I will just say here that I don't dream of easy riches. I sometimes dream of hard-earned riches. :>) I invest to make money, so I naturally hope to make money. You said, "I don't think that it's the little guy who has given up the dream (they never do until it's too late)but it appears that the institutions have... at least for now." Maybe. Maybe not. Maybe they are waiting to take advantage of some insanely low prices. Maybe I'm wrong. You said, "I saw the same thing happen to IOM (Kim Edwards) about three years ago and it took the faithful years to come to the realization that they had been had.... I learned (I was long and loaded with calls) a couple of things from my IOM experience: Buy the stock but NEVER buy into the dream. Take profits along the way because you're not the one controlling the action. Never forget that they're after your money. And when the party is over, be satisfied and move on." Look at your logic here. Reduced to a syllogism, you are saying "If A, then B", "If IOM did it, cmgi must do it too." "If A, then B," is fundamentally invalid reasoning. Additionally, you came out of a bad experience with one stock, IOM, and reached a number of general conclusions. This is inductive reasoning--always suspect. Now, I happen to think that your conclusions are generally good ones in terms of investing philosophy, but I have to believe that they came from a lifetime of investing rather than your experience with one stock. But, I have learned that few principles will stand up in ALL circumstances where the stock market is concerned. Yesterday's dumb move can be tomorrow's work of genius--and vice versa. Again, please read my previous post to Mfn. I think I touched on many of the things you mention. You won't agree with me, but at least you might see that I have thought about many of the things that rightly concern you. I am fully aware that you have shared part of your hard-earned wisdom with me, and I am grateful. You have not been that expressive of your philosophy very often, and I deeply appreciate it. I do not, for one minute, assume that I know as much about investing as you do. I do perceive that we have different styles, and I am left hoping that there are more than one road to success. If not, I am a dead duck. Many thanks, p40warhawk