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Strategies & Market Trends : Bob Brinker: Market Savant & Radio Host -- Ignore unavailable to you. Want to Upgrade?

To: Kirk © who wrote (8920)	1/6/1999 9:13:00 AM
From: Diamond Jim	Respond to of 42834

Kirk, I don't recall those exact words but I do recall a woman caller last year who told Bob her husband had put $25K in Intel, he was in dismay over it, "oh my", as if it were the biggest mistake made. She should have told Bob it was a '99 deal<g>. We know what would have been worse, you just sold your position in it and re entered, your tax loss stock. jim

To: Kirk © who wrote (8920)	1/6/1999 11:53:00 PM
From: Diamond Jim	Read Replies (2) \| Respond to of 42834

A great Bug post bashing Intel, I think it was 80 at the time. Kurlak has confessed, now where are Bug's and Bearke's? <VBSEG> Message 6004566

To: Kirk © who wrote (8920)	1/10/1999 10:10:00 AM
From: Islander	Read Replies (2) \| Respond to of 42834

Bob's got it wrong on the inflated valuations of the Net stocks. I usually follow Bob's advice, but in this case I thinks Cramer's analysis is correct. Pretty compelling comparison of AMZN and Wal-Mart. See below; Amazon's Glass Is Half-Full -- and Rising By James J. Cramer 1/6/99 1:23 PM ET Let's get out the back of the envelope. At the pace of Amazon's (AMZN:Nasdaq) fourth quarter, the company could do a billion in sales. Amazon's market capitalization is now $22 billion. Are we paying too much for that revenue? As long as I have been in the business, the benchmark for retailing was Wal-Mart (WMT:NYSE). When Wal-Mart hit a billion in revenue in 1980, its market cap was $2.3 billion. By that benchmark, Amazon is hideously overvalued -- 10 times so. Where was Wal-Mart when it had Amazon's market cap? That's even more telling: In 1987, the greatest retailing story ever reached $22 billion in market cap. At that point, it had net income of $628 million! Amazon should lose $114 million. The only logical conclusion is that the market is way out of whack in how it values Amazon. Wrong! The only logical conclusion is that the comparison is meaningless and irrelevant. It would have been wrong for a massive amount of money. And it will remain wrong. A "skeptic" says that Amazon shouldn't be here based on the "rigorous" back-of-the-envelope comparison with Wal-Mart. But an opportunist says, Give me a break. Wal-Mart is a company with $183 billion in market cap that is burdened by pilferage, sales tax and inventory concerns. It has massive real-estate costs with all of the attendant costs: electric, insurance, health care, blah, blah, blah. Amazon is a company with a $22 billion market cap with none of those burdens. The opportunist says all of these comparisons are simply odious and misleading. Amazon is a retailer in name only; in fact, it is a distribution company with the potential for gross margins that would put Wal-Mart to shame if it executes. And right now, it is executing. That makes it worth taking the gamble. You only need one $22 billion market cap stock that goes to $183 billion to become very, very rich -- which, last I looked, was still the goal. Maybe you are paying too much for that ticket right now, but maybe not. We don't know which Net company will be a winner, but we do know that there will be winners. Right now, Amazon is looking like a winner. Or, to borrow an analogy from another tech business that many people were too skeptical about, had you put equal amounts of money in Software Pub, VisiCalc, Ashton-Tate and Microsoft in 1986, how much money would you have? Answer: a ton.