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

To: put2rich who wrote (9870)	7/10/1998 10:23:00 AM
From: Ed Zhao	Read Replies (1) \| Respond to of 164684

Good morning Glenn, Amzn should find support around $94. I hope you got in Dell. Good luck! Suddenly Mark turned nice and started hyping another overvalued stock. Should we follow him into DELL or wait for DELL to double in four weeks and ride it down. XZ

To: put2rich who wrote (9870)	7/10/1998 10:35:00 AM
From: Mark Fowler	Read Replies (1) \| Respond to of 164684

Hi Mark, isn't Dell is too hi? If growth is not as expected? I know I am too value investor and sometimes miss chances. Thanks << Funny you would ask that questioned about Dell when your over here shorting Amzn. I would like to think of it as you are trying to kiss a rattle snake without getting bit... good luck! No, Dell's asset turnover is 4 times the industry growth rate. Growth rate for industry is estimated at 15 to 17% this yr. So there P.E. is in line with growth. I believe money is rotating from internet stock profits into techs.IMHO

To: put2rich who wrote (9870)	7/11/1998 10:13:00 PM
From: Glenn D. Rudolph	Respond to of 164684

More Businessweek: "COMMENTARY: NET STOCKS: IT'S A MAD, MAD, MAD, MAD MARKET Finance 101 tells us that stocks are almost always rationally priced--the theory that all information about companies and their prospects is incorporated into prices. But some investors looking at sizzling Internet stocks such as Yahoo!, Excite, and Amazon.com come to one of two conclusions: Either the market in its collective wisdom knows something about these companies that escapes the average investor, or the theory is just bunk. Certainly, most of the tools investors use to value equities don't work here. Price-earnings ratios? Many don't have earnings. Price-to-book value? Book value is a meaningless number in a business where fixed assets are scant and accounting convention doesn't value cyber real estate. Cash-flow models work well on mature companies with low capital expenditure needs, but usually don't on fast-growing tech companies. OVERPAYING. Some folks might feel more comfortable paying for a company, such as Yahoo!, that is currently profitable--rather than for one that isn't, such as Excite. But that may be a false sense of security. Look at Yahoo! Wall Street analysts are forecasting profits of 45 cents a share this year and a five-year compounded annual growth rate of 57%, according to Zacks Investors Research. If the seers are right, that 57% growth rate puts Yahoo profits at $4.29 a share in 2003. At the current price of 186, the stock is trading at 43 times projected earnings five years from now. That's nearly double the p-e ratio for the Standard & Poor's 500-stock index, based on the next 12 months' earnings. Are investors overpaying earnings of the Internet companies? It sure seems so. That's why small company investors such as James L. Callinan of Robertson Stephens Emerging Growth Fund prefers using the price-to-sales ratio. On that count, Callinan says Yahoo! sells at 80 times what the last quarter's sales figure would be if annualized. Excite, which is not expected to turn profitable until late next year, comes in at a relatively modest 12 times sales. Callinan notes that Yahoo!'s forecast revenue growth rate is 200%, compared with only 100% at Excite. But is the faster rate worth more than six times as much? Price-to-sales has its shortcomings, too. Excite might be a steal compared with Yahoo!, but who's to say 12 times sales isn't too high? Buying the cheapest company in an overvalued industry is no guarantee of getting a winner. ''Yahoo! gets a premium price because it's the market leader by a long shot,'' says Paul Cook, portfolio manager at Munder NetNet Fund. ''Not all the search engine companies will survive.'' Nor is there a guarantee that Yahoo! will stay on top. Emerging technology industries can turn on a byte, leaving today's sparkling business plan looking like yesterday's lunch. Three years ago, Netscape Communications Corp. went public and shot to 84 times sales--higher than Yahoo!'s current valuation. Aficionados bragged that it would eclipse Microsoft Corp. As if. Once Microsoft set its sights on the new kid on the block, Netscape's hot hand turned to ice. There's no doubt that, as an industry, the Internet has huge potential. But the bottom line is how much investors will pay in today's real dollars for tomorrow's yet-to-be-determined profits. Perhaps the market's extraordinary valuations on the Internet companies are rational. But it will take years at least before we know. The penalty for being wrong, especially for those buying at today's prices, will be severe. By Jeffrey M. Laderman "