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Strategies & Market Trends : Roger's 1997 Short Picks -- Ignore unavailable to you. Want to Upgrade?

To: Roger A. Babb who wrote (9039)	12/29/1997 5:51:00 PM
From: Michael Berkel	Read Replies (7) \| Respond to of 9285

Dear Mike & Roger. I am sure YHOO will fly as high as 75 and perhaps even further up into the stratosphere and so will AMZN. No doubt about it. Then, at one stage, both will stall and give back 5,6,7 points due to profit taking. But are these stocks really heading for a fall? My main question before I start shorting is: What will cause these stocks to tumble? And I mean really tumble and get hammered by 25%-40%? Which event -- other than a stock market crash or a complete meltdown -- could you think of that will see investors in YHOO & AMZN run for the exit? Think of it: the drillers went up and were beaten down out of fear for lower oil & rig prices. The semi's lost half of their value because of saturation, competition and overcapacity. Micron lost 70% of its value because of the decreasing memory prices. People are leaving tobacco stocks out of fear for litigation. People are selling because of something fishy, because they suspect a profit warning.. And that's exactly why Wall Street is so deeply in love with YAHOO and AMZN. They are regarded as Asia-proof and there is no fear that they become a commodity or something coming that will jeopardize their future revenues. Investors embrace AMZN because they believe that it will become the largest bookshop in the world, delivering books to billions of people in every corner of the Universe. Investors believe that these co's have unlimited growth potential and that this is THE industry for the next decade, even the next century, when almost every family on earth reads its newspaper and does its shopping via the Internet. That's why investors are prepared to pay such insane high valuations and that's why they will carry on doing that..unless something negative..let's say Reality kicks in, and they start dumping their out-of-favours. If not..these stocks will be unstoppable, like in the good old days with a company called XEROX which went up and up and up, year after year, without looking back. Don't misunderstand me, I am very interested in shorting but I don't see a reason for a steep decline, other than a (too) high valuation. And I was taught never to short a stock ONLY because of its insane price. I would appreciate & welcome your comments. Michael Berkel