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Technology Stocks : Amazon.com, Inc. (AMZN) -- Ignore unavailable to you. Want to Upgrade?

To: H James Morris who wrote (109634)	10/5/2000 1:49:40 PM
From: Glenn D. Rudolph	Read Replies (1) \| Respond to of 164684

Amazon is still overpriced as you say but let's look at the comments from HB today. "Investment Highlights: • We continue to believe there is long-term upside potential for the leading Internet stocks, but we stress long-term. We also continue to believe that the market is transitioning into a more mature phase of growth and that this transition, combined with a massive increase in competition across all internet sectors, will continue to cause a shakeout and consolidation. As this consolidation continues, we believe the Internet spoils will increasingly go to the few, not the many. • In Q4 and beyond, for investors seeking hyper growth companies, we would continue to emphasize the Infrastructure and B2B software sectors, which are still growing at phenomenal rates. In the more mature B2C sector, we still consider some companies with the following attributes to be good long term investments: 1) gaining market share, 2) strong internationally, 3) profitable (or showing a clear path to profitability), and 4) have a clear, defensible value proposition. The growth of advertising, commerce, international, wireless, and interactive TV should continue to fuel strong revenue (and earnings!) growth for the leading companies for the next several years." Which companies have the above attributes in B2C? I do not know. Do you? "• Similarly, especially in B2C, we would increasingly avoid the stocks of any companies that are losing market share and need additional funding to achieve profitability. The internet tide is not rising fast enough to lift all boats anymore. Moreover, as ballistic returns become a thing of the past, we expect investors to be far less generous in funding companies with dubious business propositions. • Sector valuations remain extreme by historical standards, and, as a result, rapid changes in sentiment remain the sector’s biggest risk. In Q3, as expected, we have seen a significant pullback across the sector, especially in the B2C names. Also as expected, the industry-leaders have held up better than the 2 nd and 3 rd tier players." Which firm does not need more funding to be profitable in the B2C? Ebay is not a e-commerce site. "• Despite a tough environment for online adverting in Q3 (which has lead to several pre-announcements), we continue to believe that AOL, Yahoo!, Doubleclick and other leaders will meet or modestly exceed expectations in Q3. We have talked to all three companies and remain comfortable with our estimates (consensus). Importantly, we also believe the companies will gain market share in the quarter." Who else is there to take market share from? "Internet / e-Commerce – 5 October 2000 (Continued) 2 Key Points 1. We continue to think there is long-term upside potential for the stocks of the leading companies in the Internet sector. The sector is likely to remain extremely volatile (sudden, unpredictable pullbacks, unfortunately, are par for the course), but we believe the stocks of the best companies will trend higher long-term. 2. We also continue to believe that 75% of the current crop of 400 or so public internet companies will never make money and will disappear within 5 years—either through consolidation or failure. This consolidation process is natural for any new industry, especially one as promising as the Internet. As one experienced investor we respect puts it, anytime a new opportunity emerges, “many turtles hatch, few make it to the sea.” 3. Given the sectors extreme volatility and valuations, we still consider most pure play internet stocks unsuitable investments for investors with average risk tolerance. We continue to recommend that aggressive investors with strong stomachs allocate a small percentage of total capital to a basket of the highest quality internet stocks and plan to hold them for the long term. Given the sector’s volatility, there are also often opportunities to add to positions on extended weakness and trim into frothy strength." Please correct me but I recall HB stating in the past that every investor should have a small portion of the portfolio in internet stocks so as not to miss a great opportunity. He did say a samll position. This is not consistant or am I incorrect?