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To: SIer formerly known as Joe B. who wrote (35345)	1/19/1999 9:15:00 AM
From: Platter	Respond to of 95453

Investors may be forced back to traditional stocks... "Will Waterhouse's Latest Move Help Burst the Net Bubble? By Herb Greenberg Senior Columnist 1/19/99 The Tuesday trounce: Just in case you missed it: Brokerages are starting to take steps to lower the volatility of Internet stocks. As my colleague Amy Olmstead wrote last week, Waterhouse Securities has stopped the online trading of a dozen or so top Internet stocks, including the likes of Yahoo! (YHOO:Nasdaq) and Amazon.com (AMZN:Nasdaq). But that list is a moving target, and possibly a growing and changing one too. In an interview late yesterday, Waterhouse President John Chapel said the firm has put together a task force that minute-by-minute monitors the press and cable stations like CNBC, looking for stocks that might be hot and should be added to the list. "We've tried to create an environment where we would take the froth out of these stocks," he says. Waterhouse will only allow those stocks to be bought over the telephone, through a live broker, and paid for in full. If customers want to hold them in a margin account, they'll have to put up cash equal to the value of the holdings, otherwise known as 100% margin. Meanwhile, customers who already own the target Scarlet Stocks in existing margin accounts will have until a loose deadline of Jan. 25 to put up additional cash or pay for them in full. The New York Stock Exchange's minimum margin requirement is 25%; numerous firms, including Waterhouse, have been boosting the level in recent months to 50% or higher. By taking this action, "We're looking at a situation where we hope whatever happens [with these stocks] will be a soft landing for our customer and the firm," Chapel says. Waterhouse is clearly trying to protect itself as well as its customers -- many of whom have been confusing brains with the bull market. Chapel says that his firm has found some investors hadn't realized they could risk more than the amount they had put up as collateral in their margin accounts. Many don't realize they're still on the hook to pay for a stock they may have bought at a much higher price than it was trading by the time they received their confirmation. As a result, customers are reneging on purchases. "A critical issue has been how to manage the collection of unsecured debt," Chapel says. He adds that Waterhouse could lose customers over its new policies, but he figures other firms will follow. "Our hope is that other firms will take up our lead and do what is appropriate to protect the industry, their firms and the individual customers, who may not understand what they're getting themselves into."