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Technology Stocks : Internet Analysis - Discussion -- Ignore unavailable to you. Want to Upgrade?

To: Steve Robinett who wrote (346)	4/25/1999 12:47:00 PM
From: musea	Respond to of 419

Steve, Indeed lightweight. One thing these folks never seem to do is publish the results of a sensitivity analysis (if they even bother to do one). The dependence of the final results on the initial assumptions is quite startling, especially changes in the first few years earning growth assumptions. I tend to discount analyses of this type unless they publish the full table of results. Particularly of interest is the conclusion on AMZN. Since their earnings are vanishingly small today (possibly negative), what does 50% earnings growth really mean? Not clear to me. Thanks for digging this up on a slow Sunday. -musea

To: Steve Robinett who wrote (346)	4/26/1999 1:15:00 AM
From: Chuzzlewit	Read Replies (1) \| Respond to of 419

Fascinating: Dreman said the difficulty in projecting the future of Internet companies is that many still do not have any earnings. The analysis got around that problem by relying on analysts' forecasts of what the companies could earn in their first year of profitability. The analysis then projected a large 50 percent earnings growth for the companies in the first three years, followed by a 25 percent rise for the next five years, 20 percent for six years, 15 percent for seven years and a 7.5 percent income growth thereafter. Funny, I wouldn't call this analysis. More like pipe dreams. It would be interesting to see the basis for the projections, let alone the basis for projecting earnings. TTFN, CTC