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Technology Stocks : USWeb (USWB) -- Ignore unavailable to you. Want to Upgrade?

To: Gregory Seward who wrote (882)	5/14/1999 1:35:00 AM
From: Rick	Read Replies (4) \| Respond to of 1188

Greg - No offense, but it's your kind of non-value added questions that make these chat boards frustrating. I post about companies I feel strongly one way or another about based on a specific line of reasoning. I am not always right, but I assure you that if the market goes against me whether long or short, I listen. I have done well (overall) with USWeb both long and short. It is a nearly ideal trading stock as it is very volatile and has captured the imagination of daytraders. If it frustrates you that I believe that it is a poor long term investment and requires a traders mentality, there's not much I can do about - that is my perspective. period. It doesn't surprise nor bother me to see USWB surge up or crater down. I have been watching it do this since it went public. I have no doubt that the next few years will provide more opportunities to make money long and short. But, from a long term investors perspective, it simply doesn't make sense to pay $1,500,000 for a programmer or graphic artist that can generate about $150,000 in revenues, and perhaps $50,000,00 in earnings. In my book that's about a 3% return on investment and it doesn't cut it. I think that's close to what my checking account pays. Clearly, some people believe that the future growth is so bright that it is reasonable to pay such multiples. But my guess is that most USWB investors haven't clue 1 about any of the valuation metrics. The level of analysis that most make is this: uh, internet related, it's hot, I think I'll buy some. The latest argument I heard about why USWB is better than other internet related stocks is the old adage about how during the gold rush it was the companies that made picks and shovels that got rich. The analogy is that USWB is making picks and shovels (websites) for customers. Here's the main problem with the analogy: once you manufacture the pick or shovel, it doesn't have a clue how much it cost you to make it, and it doesn't have a clue how much it is being sold to customers for, it never demands a higher salary, it certainly never requires options for ownership, it never leaves a project midstream, it never pisses off the customer, it never sexually harasses other picks and shovels, and customers weren't making their own picks and shovels. The bottom line is that this business model just ain't a great way to make money, as the upside of value creation is always shared with employees (options, high salary, etc.) and customers. USWB could help create a web site that makes unlimited sums of money for it's customers, but it is unlikely that they will capture any value in excess of the going rate for technical labor. Sorry to overload you with complex ideas, as I guess your more comfortable in a world where anybody that doesn't think a stock is a worthy long term investment is an insincere shortseller, and anyone that likes a stock is an insincere long. It's a simple world and of course you are free to live in it, but closing your mind to ideas just ain't gonna make you alot of money. cheers. jbd.