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

To: Jing Qian who wrote (7818)	4/13/1999 11:47:00 AM
From: David Harker	Read Replies (1) \| Respond to of 29970

>Why can't it be that valuation of Internet stock will be as >high as today in 10 years? It's not necessary that YHOO's P/E >has to drop from 8000 to 100 in 2010. Anything CAN happen. It is unlikely, and without precedent. Railroads were completely revolutionary - quite a step up from a horse-drawn wagon. Their stocks and bonds were amazing investments (really - read up on it). Railroads are still here, 80-100 years later, but the P/E's aren't 8000 anymore... In the 60's, it was semi-conductors - all revolutionary new things get people really excited, then it fades... the underlying "Revolutionary" things (railroads, chips) are still here, and very useful today, while many of the original firms that brought them here are long gone. My point is psychology and its effects on prices of current Hot Stocks. Railroads, chips, and the Internet are very different things, but there are common threads in how the public views (viewed) them as investments. This is only one example, from history. I don't care if anyone disagrees, this is FACT - that these technologies caused stock booms, followed by declines. There are many waves when stock market history is reviewed, this is one of them. The lifetime of the wave is impossible to predict, as is the eventual maximum height. I'm just saying it's a wave, not some perputual ride into Heaven. I like waves, made lots of money on this one (22.25 to 90 in ATHM) and got off too soon, but I'll live, there are always new waves. Quadrupling your money from $140 is harder than from $22.25, I'd guess...but it MAY happen. May the best surfer win...