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Technology Stocks : AUTOHOME, Inc -- Ignore unavailable to you. Want to Upgrade?

To: Warren L. who wrote (7798)	4/13/1999 1:28:00 AM
From: Bahama	Read Replies (2) \| Respond to of 29970

Hello Warren, that's all true but...at some point in the not too distant future there will be a new (higher) level of "normal" efficiency to which all businesses are compared or judged. The bar will be raised for all, and efficiency 'excess' that might exist today will be nullified. Efficiency doesn't just increase without bound. Margins will increase by percentage points, not by orders of magnitude. Eliminating inventory or cutting out middlemen doesn't cut prices by huge percentages. Revenues will SHIFT more toward 'net-oriented companies in many (but not all) businesses, but these too will stabilize. Products that used to be sold in "brick 'n mortar" will change channels, but should a mere change in distribution channels cause an increase in product demand? Convenience, you argue? Sure, initially, but what seems so convenient now will become the minimum standard, and will no longer hold that edge in the future. Take AMZN, for example. Ask people that have been buying products from AMZN for 18 months-2 years about their rate of purchases over that time frame. Most will say it was huge initially and is just a relative trickle now, because the "Christmas toy" phenomenon has worn off. My main point is that the run-up in the stock prices of conventional businesses that just changed channels is totally unjustified. It's the net-specific businesses, where they basically don't exist without the net, that it's hard to quantify if they've come too far. I tend to think not in many cases because there's still much "conversion" to be done. Channel changers are not the place to be. Channel creators are.