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To: Hawkmoon who wrote (25991)	1/12/1999 9:54:00 AM
From: Alex	Read Replies (1) \| Respond to of 116896

A Bookstore Bigger Than Norway by Bob Harris Priced any internet stocks lately? This isn't just a speculative bubble. If Richard Branson's balloon was this large, he'd be all the way to Morocco by now. What's more valuable? The bookseller Amazon.com, which has yet to show a dollar in profit and is dwarfed in several respects by several of its competitors, or the country of Norway? You guessed it. Do the math, folks, and according to the speculators now ruling the casino on Wall Street, the market capitalization of Amazon.com now exceeds that of the entire stock market of Norway. Does that sound reasonable to you? It gets better. Suppose for a second that Amazon.com had a complete monopoly on every book sold in the United States. According to Barron's, the stock is still priced at fifty times the hypothetical earnings. Which means Amazon.com is now worth five to ten times what it would be worth if it sold every single book in America. Are we getting close to a crash? Oh, possibly. That hissing sound you hear might just be the airbag getting ready to [deflate]. Calling the exact timing of market movements is considered almost impossible, but two of the most powerful indicators of an impending downturn are a) the opinions of investment newsletters, and b) the ratio of people buying call options, (a high-risk, high-reward way of betting the market's about to go up quickly) to those buying puts (a similar bet on an impending drop). Both of these groups are notoriously wrong, so when you see all the newsletters going positive, or you see twice as many calls being bought than puts, that's usually a good time to start looking for the exits. Last week, Barron's reported what they termed a "buying panic" in call options, and the investment newsletters were more bullish than they've been in seven years. Uh-oh. This is just one guy's opinion here, so take my advice at your own risk -- it could be weeks before a downturn, or even months -- but remember the last time I was this amused by stock overvaluations was literally days before last summer's big pullback (radio edition of The Scoop, broadcast on KNX 1070 AM in Los Angeles 7/11/98). So do your own thinking. Norway, Amazon. Amazon, Norway. Hmm... I don't want to alarm anyone out there, but... RUN!!!!!!! The Scoop, Jan. 11, 1999