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To: Ralph Cosenza who wrote (627)	1/29/1999 8:19:00 AM
From: GT	Respond to of 2489

News- Greenspan says today that "NOT ALL INTERNET STOCKS ARE HYPE" internets will rocket today on this news..... ---------------------------------------------------------------------- Friday January 29, 12:56 am Eastern Time FOCUS-Greenspan says Internet mania not all hype WASHINGTON, Jan 28 (Reuters) - Federal Reserve Chairman Alan Greenspan said on Thursday ''hype'' was helping to feed the frenzy over Internet stocks, but some of the run-up made sense because the fast-growing sector shows enormous promise. Indeed, Greenspan said some loftily priced web companies may well succeed. ''Is there some hype in this? Of course, there's some hype,'' Greenspan told the Senate Budget Committee in his first detailed comments on the soaring Internet segment. But he added that the hype would never have caught hold if there were not some sound reasons for buying into the sector. ''The size of that potential market is so huge that you have these pie-in-the-sky type of potentials for a lot of different vehicles,'' Greenspan said. ''Undoubtedly, some of these small companies which have stock prices going through the roof will succeed and they very well may justify even higher prices. The vast majority are almost sure to fail.'' ''He is looking at the reality of the situation. Even though valuations are looking a little stretched, industries that are new generally carry some excessive multiples,'' said Barry Hyman, strategist at Ehrenkrantz, King and Nussbaum. Pierre Ellis of Primark Decision Economics in New York said Greenspan's remarks about Internet stocks showed a reluctance to interfere with the market despite some wariness at the Fed. ''The stock market is about risk-taking,'' Ellis said. ''He can't say a certain sector is overblown.'' At the Senate hearing, Greenspan said he saw validity to the comparisons between the stock market and a lottery, especially when it comes to risky areas such as the Internet: the market's bettors are putting down cash against steep odds in the hopes of reaping huge riches. ''What lottery managers have known for centuries is that you could get somebody to pay for a one in a million shot,'' he said. But he emphasized that such gamblers provided benefits to the economy. ''Mainly, that they do endeavor to ferret out better opportunities and put capital into various different types of endeavors prior to earnings actually materializing.'' He concluded, ''With all of this hype and craziness -- that is something that at the end of the day is more plus than minus.'' --------------------------------------------------------------------------------