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Technology Stocks : SYNTEL (SYNT) - Upcoming Year 2000 IPO -- Ignore unavailable to you. Want to Upgrade?

To: R. Bond who wrote (2261)	12/13/1998 3:33:00 PM
From: Stephen	Read Replies (1) \| Respond to of 2761

Bond, ...OT ... and butting in ... sorry !! Just a few cautionary words ... just my opinion, about the internet companies. A large part of their success is due to a number of components that need careful consideration before dipping into the pool. Firstly, there is a supply/demand issue ... with thin floats, demand causes them to fly Secondly, there is a tendancy for large short positions to build up in these stocks, which adds a fueling factor to the price gains because of; Thirdly, the retail investors being driven by what I call the E-factors. E-commerce, earnings & events. Because retail investors are more event-driven (a factor which is becoming more prevailant in the overall market), they buy on news and the shorts cover at any price .... which can be awful because of the low float Fourthly, the internets can't miss earnings ..... or haven't ... until SEEK just did. SEEK missed earnings because of the need to post real figures with the Disney deal becoming complete. Without that overhanging them, they, just like all the others would have beaten the street. Questionable accounting is a big turn-off for me. So ... what this means to me is ... by all means play the internets, but be careful when you do. If the overall market looks strong, then its a fairly safe thing to do .... especially around earnings. If the overall market starts to look weak, or one has doubts about its direction & strength, then look out, because the thin floats mean that when they start falling they can go down a long way very quickly. The other option is to invest money for the long term and try not to look at whats happening to it. However, I would personally be wary of buying into any third tier company. Finally, someday the internets will looked at in a more fundamental manner ... who knows when .. but there will be plenty of time to make and lose money on the way ! Good luck all Stephen