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Strategies & Market Trends : Three Amigos Stock Thread -- Ignore unavailable to you. Want to Upgrade?

To: Ditchdigger who wrote (13019)	1/25/1999 10:31:00 AM
From: MoneyMade	Read Replies (1) \| Respond to of 29382

FTRK she's running now...<eom> Who couldn't figure the dow would be in the tank!

To: Ditchdigger who wrote (13019)	1/25/1999 6:17:00 PM
From: Sergio H	Read Replies (2) \| Respond to of 29382

DD, while you're cleaning up around the house....here's one of my favorite newsletters. Comments welcome. EXTRA! EXTRA! (Today's Feature Headlines) ***************************************** EUPHORIC CLOUD SURROUNDING INTERNET ISSUES MAY BE DISSIPATING By John Dawe In the December 23/98 issue of the Express we provided one of our series of ‘Ongoing Stories Small Cap Investors Should Watch For In 1999'. In this particular piece we covered how the wild price swings of Internet stocks might cool in 1999 due to three factors: the availability of more Internet IPO issues; better investment research; and better corporate finance underwriting practices. In the last couple of weeks some of the euphoria appears to have lifted from the Internet issues and it seems like an appropriate time to check the logic of our December prediction. On point number one, there is no doubt that many more Internet IPOs are currently in the pipeline and will hit the market within the next two quarters. On our second point, we also appear to be correct based on the increasing frequency of analysts' comments regarding Internet companies being founded on examinations of the core business underlying a particular company rather than the period and the letters c, o and m following its name. A key example of this is the news that market watchers are starting to evaluate the portal destination sites as if they were software companies and are viewing Amazon.com as if it is simply a bookstore - which amazingly enough it is! On our last point, the jury is still out until we see whether the underwriters have sharpened their pencils to work on the upcoming series of IPOs. Of note, we did miss noting two other trends that are now surfacing in the analytical write-ups on Internet stocks. These are the potential consolidation of parts of the industry due to the over-proliferation of Internet competitors within various sectors and the approach of portfolio managers regarding asset allocation of Internets within investment funds. The best example recently regarding the issue of consolidation has been the purchase of the Excite portal search engine by AtHome Corp. Although this can hardly be called a small cap transaction, it may prove to be of interest to small cap investors because it could be a signal of a coming round of consolidation of the newer, smaller Internet companies within other market sectors. With respect to the asset allocation story, it is encouraging to read that some fund managers are incorporating Internet stocks into their investment funds based on how they represent value within an industry grouping. In other words, some analysts appear to be recognizing that it is the health of the core businesses underlying various companies which is the key to their valuation, not just that they might use the Internet as a delivery tool. In fact, some have even commented that Amazon.com, for instance, represents an equity holding of a bookstore - not a technology company. Further, coming into 1999 it is good to see that analysts are getting a handle on the Internet valuation process and are falling back on fundamental analysis to determine the relative value of securities. Small cap markets have a far better potential to rally if analysts are seeking out opportunities based on the use of relative valuation as a selection tool. Many small cap stocks are undervalued compared to the large cap market and may represent good candidates for inclusion in the growth component of fund portfolios. The trend back toward logic as a useful means to select a stock purchase may just be the factor that aids a rebound in the small caps. To access a report relating to this story you may wish to try the following hyperlink: nationalpost.com msnbc.com cbs.marketwatch.com