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Non-Tech : E*Trade (NYSE:ET) -- Ignore unavailable to you. Want to Upgrade?

To: Peter Church who wrote (5468)	3/8/1999 12:36:00 AM
From: ecommerceman	Read Replies (2) \| Respond to of 13953

Peter--Thanks for your thoughtful response. I'm not disturbed but very pleased that ETrade continues to expand "into new geographies and niches." This only makes sense (assuming that these new geographies and niches are profitable, of course). If you read the Cotsakos interview that I posted earlier, you'll remember that he said that ETrade is now making 70% of their revenue from trading, down from 90% not too long ago, and they hope to get that figure down to 50% in a year or two. Assuming he is telling the truth, that's a good sign, IMO. The less dependent they are on trading revenues the better. I believe that online trading is the future for several reasons: 1) It's fun. In fact, I think it's a blast; I'll admit that I'm having a much better time now than when I was down $30k, but even then I found it a much more engaging pursuit than watching mindless TV shows. Maybe this is simple-minded, but I figure that if I enjoy it this much, then others (hopefully many others) likely do, too. The rising account numbers seem to bear that assumption out. 2) I think you're under-estimating how many well-to-do folks want to take control of their own financial destiny, and are turning to online traders like ETrade. This reason and only this reason is why Merrill-Lynch is moving to establish their own on-line operation after aiming a good deal of derision at on-line trading--they feel they have no choice, and they're right. They know if they don't do it, they're going to start losing customers. 3) Over 25% of all trades are done with on-line firms, and we're only 3 years or so into on-line trading. This is a startling figure, and will only rise in the future as folks get tired of paying $200 for a trade. 4) And not only is on-line trading sweeping this country, it soon will sweep the globe. Cotsakos says that he wants to set up ETrade affiliates in the top 30 financial centers of the world--can you imagine the revenues that will generate? I do agree that if the internet bubble (if that's what it in fact is) bursts, there's going to be a fair amount of E*Trade blood on the floor. With the astonishing growth of the internet, though, I'm not completely convinced that it's a bubble (which isn't to say that a fair amount of internet companies won't go bankrupt along the way, though), and it could be that a year from now we'll be at a much higher point than we are now. In sum, if I were a daytrader I'd be nervous as a cat with this one. As an investor with a long time-line, however, I'm extremely confident that I'm in very good shape. Time will tell, of course.