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Technology Stocks : Amazon.com, Inc. (AMZN) -- Ignore unavailable to you. Want to Upgrade?

To: Jan Crawley who wrote (44833)	3/9/1999 6:40:00 PM
From: Sarmad Y. Hermiz	Read Replies (2) \| Respond to of 164684

Jan, I covered my short at 129, then bought long. All the nets were down healthy amounts, except Amazon. It seemed people were just waiting for a broker to tell them it is OK to buy. But even with the main move up, there were a couple of chances to buy at 126 after the 133 high was reached. So the box would work. However, I think the tide has turned to favor the longs. But I know you don't care. Whether the fruit is on a low branch or a high branch, you reach for it.

To: Jan Crawley who wrote (44833)	3/9/1999 6:41:00 PM
From: Glenn D. Rudolph	Respond to of 164684

Investment Highlights: * We regard the Internet as a global mega-trend, along the lines of the printing press, the telephone, and the computer, that is changing the way companies and people communicate, research, buy, sell, and distribute goods and services, and spend leisure time. We believe it will affect multiple industry sectors in the world economy over the next decade. * We believe the Internet will continue to cause the creation and/or redistribution of hundreds of billions of stock market capitalization in a variety of sectors—with big winners and big losers. * We recommend that investors develop a comprehensive, industry-by-industry, Internet investment strategy, whether direct or indirect, offensive or defensive. The aim of such an exercise would obviously be to move money 1) where the growth is, and/or 2) out of the way. * We agree that the leading pure-play Internet stocks look very expensive, but we think there are good reasons to own small positions in them anyway. Among these is the belief that the real “risk” in such open-ended opportunities is not losing money, but missing big upside. * We recommend that aggressive investors allocate a small percentage of capital to a basket of high-quality Internet stocks, such as America Online (AOL, D-1- 1-9, $89 7/8), Yahoo! (YHOO, D-2-1-9, $167 5/16) , and Amazon.com (AMZN, D-2-1-9, $129 15/16). In deference to the dizzying valuations, we would not “bet the farm” on any one stock or the sector as a whole. * We believe the least risky Internet investments are also the most expensive—the sector leaders. If the “bubble” ever bursts, we believe that what will be left are a few fast-growing companies with big market capitalizations—and a lot of wreckage. * We believe that the Internet stocks will continue to be sentiment-driven and extraordinarily volatile—and there are clearly favorable and unfavorable times to buy them (although the only mistake thus far has been to stay permanently on the sidelines). In the event of additional “boom-and-bust” cycles (e.g., January), we would actively manage risk exposure. * We believe that the leading Internet stocks will remain extraordinarily expensive until the fundamentals beneath them weaken or stop improving (at which time, we expect significant sector-wide multiple contraction). We do not believe that valuation alone will bring the stocks down. Comment United States Internet Software & Svcs 9 March 1999 Henry Blodget First Vice President Internet / Electronic Commerce Overview of Our Internet Investment Philosophy Reason for Report: Initiating Coverage Merrill Lynch & Co. Global Securities Research & Economics Group Global Fundamental Equity Research Department RC#30206828 Industr y