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

To: Jan Crawley who wrote (34377)	1/11/1999 9:21:00 PM
From: freeus	Respond to of 164684

I have never been an Amazon holder except for one short (made $250 when it was 106 and went down) and one call (doubled, just last month). So I was amazed to hear STEVE FORBES quoted today as saying "Dont ignore Amazon, Dont ignore the internet... its the future." He went on to say the valuation is very high, but the future holds unlimited promise and Amazon is not weighted down by stores and muliples of emplyees. Also Philip Treick, manage of the $200 million dollar Transamerica Premier Aggressive Growth Fund says he first bought Amazon (his top holding) in 1997 at 9!!!!!! He added more throughout 1998 and watched in amazement as it soared to more than 350, split and continued its climb in 1999. Amazon helped life the fund to an 84% return in 1998.Here's the IBD interview (Friday, Jan 8th) IBD "Phil, Amazon, your largest holding at 13.5% of the fund, ran up 966% in 1998, and it sports a p/e of about 384. Is it time to cut back your position? Treick: I wont sell just because the price and the valuations have gotten so high. The traditional valuation measures cant be used with a stock like AMZN. They are purposely pursuing a strategy that forgoes profits today to gain a greater number of customers. IBD: So you plan to keep buying more AMZN? Treick: No, not right away. The way I manage a stock like AMZN is to not buy more. If I dont add to AMZN, as more money comes into the fund, the size of the AMZN stake is diluted. This means I am effectively selling the stock. (HUH? I know he means diversifying but what a strange way to put it.) IBD: But if you actually trimmed, you would lock in a hefty profit for the fund! Treick: That's true, but I will also lock in a big tax liability for my shareholders. My strategy for big winners like AMZN and DELL is to hold for the long term.We all (fund managers) have owned the wineners like AMZN at one time or another. The big difference between them and me is that I own more of the winners and I hold on. To me, managers underperform the S&P because they dont hold on to the highfliers. IBD: So far, thats a great strategy. But even big winners cant grow forever. Isnt there a chance that AMZN has peaked? Treick: Amazon's business continues to improve, primarily because its moving into additional business segments, such as music records and tapes. IBD: But the gross profit margins on this new business are awfully low. Treick: The recoreds and tapes distribution business is a competitive, low margin business to begin with. But AMZN will do it on a very large scale, which means the margins will increase. IBD:Do you think AMZN's management could make a mistake that would sink the stock? Treick: Sure they could do something stupid like opening stores. No company has a monopoly on intelligence. But I will say that AMZN management is the smartest group of individuals I have ever come across.Its like MSFT on that score. End of interview. Freeus