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Technology Stocks : America On-Line (AOL) -- Ignore unavailable to you. Want to Upgrade?

To: jhg_in_kc who wrote (2220)	1/10/1999 7:46:00 PM
From: Chuzzlewit	Read Replies (3) \| Respond to of 41369

JHG, I would appreciate your posting of various articles. I am convinced that AOL is a solid company, but I am not convinced that its price is supported by the fundamentals and reasonable expectations for future earnings gains, and this anxiety is further heightened by the the nature of the conversations on this thread. If the price of the stock is this high because momentum players are in control we could be seeing some pretty drastic and persistent price erosion based entirely on the herd mentality. That is my only fear. Look at what happened to companies like Cascade Communications in February 1997 when they company announced that future earnings would not match the torrid pace previously set. As I recall, the price tumbled from around $95 per share to around $26 in short order. And yet, the companies competitive position remained solid. It has since been acquired by ASND, but if you were to calculate the equivalent price of Cascade, it would be around $50 per share, still about 45% less than its high in January 1997! That's what happens when insane prices are attached to quality companies. TTFN, CTC