To: Terry Maloney who wrote (252029 ) 7/24/2003 4:18:46 PM From: mishedlo Read Replies (2) | Respond to Some of this text is truly amazing. I have seen this post before but this is the first time I really looked at it closely.you have to throw out all of the matrices and formulas and texts that existed before the Web. You have to throw them away because they can't make money for you anymore, and that is all that matters. We don't use price-to-earnings multiples anymore at Cramer Berkowitz. If we talk about price-to-book, we have already gone astray. If we use any of what Graham and Dodd teach us, we wouldn't have a dime under management. Let's start with the world in the early 21st century, a world where capital is abundant for a chosen few and nonexistent for just about everybody else. It is a world where the whole of Wall Street and Silicon Valley is at your fingertips if you are creating the infrastructure for the New Economy , and a world where neither Wall Street nor Silicon Valley could give a darn about you if you are using that infrastructure. In fact, we would rather own the loser in that tech bake-off than the winner in nontech , because in this new world, there is so much business to be done for the i2s and the Oracles that the capital will remain plentiful for them, win or lose a particular piece of business. An outfit like priceline will change the very nature of brands in this country. It won't destroy the premium brand, but it will force everyone else out of the market. Why? Because the way priceline works is that we are trying to buy the premium brand for the price of the off-price brand. That means the off-price brands, whether they be Colgate (CL:NYSE - news) or Dial (DL:NYSE - news) or Hunt's or Ralston (RAL:NYSE - news), are simply doomed by the Web. once everyone realizes that Amazon recreated Wal-Mart online because it will forever have access to cheap capital. Why do I say forever? Because at a certain point, it will be done with its buildout and will effectively be able to cherry-pick whomever it wants to destroy while having it be subsidized by other areas. It will be Home Depot (HD:NYSE - news) vs. Wal-Mart vs. Amazon in the end. Nobody else. And that's only if Home Depot figures out it better get on the Web and fast. How can Bank of America compete with Nokia as a way to bank?
