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To: re3 who wrote (34269)	4/17/1999 9:06:00 AM
From: accountclosed	Respond to of 86076

Just as every investor had to decide a few years ago what to do about Japan (then the hottest market going), every investor today has to decide whether to try to ride the Internet mania, or to sit it out. ... After hypothesizing what earnings will be in years to come, the two analysts assigned a present value to the earnings, discounting the future earnings stream back to the present at a 15 percent annual rate. (That represents the current Treasury bond rate of close to 6 percent, plus a ''risk premium'' of about 9 percent. The risk premium represents the minimum return above Treasury bonds an investor demands to take on the risk of an equity investment. It's probably safe to assume that Internet investors expect to make at least 15 percent return a year.) ... By this method, eBay Inc., the No. 1 online auction house, was the most overpriced of 10 leading Internet stocks examined. It was worth $6 a share, though it sells for about $165. Next most overvalued was Yahoo! Inc., which was calculated to be worth $15 a share. Yahoo, the leading Internet search service, goes for about $183. America Online Inc., the biggest online service provider, came next, with an estimated value of $30 and a stock price of $141. Qwest Communications International Inc., Lycos Inc., and Excite Inc. all sold for a little more than twice their theoretical value under the model. E*Trade Group Inc., Ameritrade Holding Corp. and Amazon.com Inc. sold for roughly 33 percent more than their theoretical value. Cisco Systems Inc., which isn't a pure Internet play, had a theoretical value of $118 under the assumptions. That is almost exactly Cisco's price of $118.81 when the calculation was done. Today, it trades at $108. Cisco is a more mature company than the others. It's therefore harder to imagine that its profits will grow at the rates postulated. ... And even if you assume that such uncanny growth is achievable, most of the leading Internet stocks are still overvalued. bloomberg.com

To: re3 who wrote (34269)	4/17/1999 9:21:00 AM
From: Tommaso	Respond to of 86076

I am afraid I stick to US oil and gas trusts because the income tax situation is well-defined (if a little troublesome at tax time). Although it's not been paying much lately, BPT is interesting because of the leverage (which I did not realize when I originally bought it). If oil prices should get up into the $25 range again any time in the next two years, its price could easily double as well as providing payouts equal to about 20% of the current price. But that's a big "if."