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

To: Gary Walker who wrote (32345)	1/4/1999 1:05:00 AM
From: Spytrdr	Read Replies (1) \| Respond to of 164684

AMAZON buying CDWC?

To: Gary Walker who wrote (32345)	1/5/1999 10:55:00 AM
From: Rob S.	Read Replies (2) \| Respond to of 164684

Yes, I guess saying that the stock is overpriced does say that I think I know something that the market doesn't. "Perfect Market Theory" is a nice text-book story but is a lousy justification for good-sense investing. The market may take into account all factors and price a stock perfectly over time. But short term phenomenas, like the early momentum of Internet growth, are not understood well by the average mania-driven Internet investor. I think Amazon may eventually grow to be a $10+ billion sales company as Bezos has imagined. Investors may be aware of those glowing predictions and the enormous current growth of Internet commerce but they are fuzzy headed about the effects of competition on profits <losses>. Were investors correctly valuing the bio-tech stocks in their heyday? (only 1 out of 4 bio-techs went on to make a profit or be acquired). Did investors perfectly price tulip bulbs when there was a mania? Amazon is a pretty neat little company but it's wrong to justify valuations by some lazy dictum that "it must be worth this much (more than Sears and Nordstrom's combined) because I am willing to pay this much for it." It is a speculative investment but which way this over-priced monster goes from here is only due to short-term supply and demand and has little to do with long-term justifications. Sales growth will slow from hectic pace of last quarter and losses will continue to widen. Meanwhile, competitors, while still much smaller, are growing at a more rapid pace. All commodity retailers will end up as low margin utilities in the information driven age. The stock will be down 30% or more by this summer.