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To: Sir Auric Goldfinger who wrote (414)	10/27/1998 11:36:00 PM
From: David Lawrence	Respond to of 28311

Auric, I'm not about to try and rationalize the present day valuations of "Internet" stocks. Ultimately something will have to give - either high, sustained run rates in both revenues and income, or lower relative valuations. It'll probably be some of both, and the process could take months or, more likely years to converge, with a lot of volatility for the duration. I've owned, bought and sold "closely held" companies. I suspect from your valuation arguments that you have as well. However, I think you are overreaching by trying to impose private market valuation models on public companies. We we buy a company in its entirety, we can arrive at absolute valuation ranges, typically based on ROI in terms of cash flow, appreciation, liquidation value, or any combination. However, we typically forfeit liquidity. By contrast, holding shares in a public company with a decent float gives us liquidity, which inherently brings a higher value. It comes down to seeing the forest from the trees, and exercising good timing. All to often I've been burned in a well researched and fundamentally sound investment by having it turn sour due to a shift in market sentiment, misleading PR by a competitive firm, or some other innocuous or unrelated event. You can grow old waiting for a fundamentally sound "well valued" investment to bear fruit. When investing in the public markets, my tact is to leave the "tried and true" methods of valuation as a secondary factor to "how will the public market value it".

To: Sir Auric Goldfinger who wrote (414)	10/27/1998 11:50:00 PM
From: David Lawrence	Respond to of 28311

Right after I posted, I became aware of an article written by a fellow SI'er pertaining to the inefficient market. To some extent, it goes to the recent conversation on this thread. investorsalley.com I'll take credit for the part pertaining to the arbitrage of ISCG and FCGI.