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To: HG who wrote (45531)	3/12/1999 9:53:00 PM
From: JOHN W.	Respond to of 164687

Contrarian pans Some of the biggest Internet high fliers get blasted as overvalued and overrated at Contrarian Investing's web site. It says its 10 pans are the stocks analysts are pushing the hardest and the crowd is rushing to buy, but they're stocks that have the farthest to fall when investor sentiment turns. Among those Contrarian Investing thinks you should avoid; eBay (EBAY). The site says the online auctioneer has been mistaken for a tech stock. If eBay were categorized properly, as an auction company, it'd be a different story. It suggests investors compare eBay's valuations to established industry leader Sotheby's. ETrade (EGRP) is also misclassified according to Contrarian Investing, which says the company is a brokerage firm and not a tech stock. And ETrade, like all brokerage firms, is subject to the cyclical ups and downs of the industry. The site also thinks when the current Internet bubble bursts, ETrade will be hurt more than most because the excitement of online trading will lose its luster when the market enters a change in direction. Contrarian investing says valuations on Yahoo (YHOO) are "at manic levels, even compared to its overpriced industry". The site says portal's are this year's fashion but everyone has bought the stocks and everyone in the online arena has rushed to start their own portal. So when sentiment turns, Contrarian Investing says "it will be ugly for holders of this stock". Read the full story It's the revenue, stupid Putting a value on Internet companies seems to be the biggest challenge for investors these days. Especially when it's almost impossible to justify some stock prices by traditional methods of valuation. Analysts and brokers have been struggling to come up with new methods that justify some of those sky high prices. Red Herring's web site takes a look at one measure that has gained more or less universal acceptance: the ratio of stock price to annualized sales or revenue per share. The acceptance of the PSR, or price/sales ratio, writes David Simons, reflects investor belief that its more important for Internet companies to grow revenue than profit. But he says it's a lot trickier than that. Revenue requires consideration of the type of business a company is doing. He uses an example comparing Yahoo (YHOO) to Amazon.com (AMZN). Amazon sells books. That requires inventory and that's an expense. Yahoo sells ads which requires no inventory and therefore no related expense. Simon says that's why Yahoo's PSR is three times that of Amazon even though Amazon's sales were three times that of Yahoo last quarter. Simon figures there's a better way to compare e-tailers; price to gross profit ratio, or PGPR. That, he says, narrows the valuation gap between Yahoo and Amazon from 200 percent to 30 percent. It's a complicated argument and you should read Simon's reasoning for yourself, but the bottom line is simple. Just comparing Internet stocks against each other says nothing about intrinsic value. Simon says with the psychology that so heavily influences Internet stocks, traditional measures of valuation don't mean much. Read the full story

To: HG who wrote (45531)	3/12/1999 9:54:00 PM
From: JOHN W.	Respond to of 164687

redherring.com

To: HG who wrote (45531)	3/12/1999 10:02:00 PM
From: Sarmad Y. Hermiz	Read Replies (2) \| Respond to of 164687

>> and a 2 point gain minus commission minus tax would have been meaningless... This is unrelated to other things, but you could tell tour broker you want to pay only 20c per share commission up to 300 shares, and 15c per share up to 900 and 10c on thousand and higher. It is very likely they will accept your generous offer. And if they don't you can always get an account at Discover or Schwab.