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

To: GST who wrote (34143)	1/10/1999 7:27:00 PM
From: Glenn D. Rudolph	Read Replies (1) \| Respond to of 164684

By Jennifer Westhoven NEW YORK, Jan 8 (Reuters) - Wall Street veterans are wondering; When is E-nough enough? Internet mania continued on Wall Street Friday and analysts are asking how ugly the landing might be if this high-wire act loses its balance. But even the doomsayers are unwilling to call a top. On the whole, more analysts are shifting to pejoratives like "mania" and drawing parallels to historical crashes. Michael Farr, president of Farr, Miller & Washington, a fund based in Washington, compared the latest buying surge to 19th century land rushes. "You're placing the stakes on land that may bear no crops. This is a very expensive way to take these kinds of chances," Farr said. On Friday, cyber stocks still had the power to astound. Broadcast.com Inc. <BCST.O> jumped $65.50 to $197.50. Nasdaq briefly halted trading, but the company said it had no comment, which many took as a signal that there was no material news driving the gains. The IIX <.IIX>, an American Stock Exchange index of internet stocks, hit a new high. It has more than doubled since October 8, a day chartists mark as an important low. Amazon.com Inc. <AMZN.O>, the Internet retailer, is up more than six-fold since then. So is E*Trade Group Inc. <EGRP.O>, the online trading firm, while online auctioneer eBay Inc. <EBAY.is up more than tenfold. And these are just a few. The gains have invited constant comparisons to Charles Mackay's 1841 book "Extraordinary Popular Delusions and the Madness of Crowds", which holds that reason can sometimes leave financial markets, with disastrous consequences. But if and when a denouement comes, when "e-nough" is enough, analysts do not think that a downturn would affect the U.S. economy or spoil the stock market like "Tulip Mania". A craze for tulips had the 17th century Dutch betting on options on tulip bulbs until a crash in prices nearly strangled the Netherland's Golden Age economy. "Even if they were toreally tag them and (the speculative stocks) fall 25-30 percent, would it cripple the rest of the market? No," said Ralph Acampora, a technical strategist at Prudential Securities. "It might slow us down and cause a correction, but this frenzy is in one sector, not across the board. I would not lump this together with the entire market." Gary Campbell, chief investment officer at Commerce Investment Management Group in St Louis, Mo., said that, with few funds heavily invested in Internet stocks, a downturn would hurt but the effect would be limited. "The biggest risk is to those individuals who have too much of their portfolio in this sector," he said, but added that he thinks most fund managers are steering clear. "Who wants to get the call from Morningstar when they ask, 'What were you thinking?'" he said. Even with the conventional wisdom looking ahead to a correction, plenty of analysts see room on the upside. "I think they're going higher," said Acampora., but he limits his recommendations to a few blue-chip high techs, including Microsoft Corp. <MSFT.O>, Intel Corp. <INTC.O> and Dell Computer Corp. <DELL.O>. Premature bets that the sector would topple have left investors with empty pockets. "I thought (Amazon) was overvalued...loaded up on puts and became road kill -- to put it mildly," one investor confessed on a Silicon Investor web site. REUTERS Rtr 18:00 01-08-99 Copyright 1999, Reuters News Service