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Technology Stocks
Internet stocks for the long-term?
An SI Board Since August 1999
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Emcee:  Joe Mintz Type:  Unmoderated
Net stocks have clearly been day-trader favorites - the excessive degree of volatility has led to substantial opportunities, but also incredible risks.

What about the long-term investor, who does not have the time or the desire to engage in short-term trading but instead wants to position a solid portfolio for the longer-term? I would argue, as many, that some internet stocks will provide stellar returns in the next few years based on the remarkable growth in e-commerce and demographic trends.

Keeping the long-term in view, however, can prove difficult when one's portfolio fluctuates over 10% in a single day. Even the financial experts have become baffled by the stunning volatility in net stocks, and it seems questionable to what extent past experience and analysis of historical data can help in this case.

Furthermore, like many others, my time is almost fully occupied during the day, and I do not have the leisure to place trades at any given hour. Quite frankly, I am also not very interested in day-trading, but more interested in long-term capital gains and the thought processes that go with it.

This discussion is intended, difficult as it is, to look toward the long-term in the internet sector.

The general guidelines are meant to be the following although basically any comments on how to benefit IN THE LONG-TERM from internet stock holdings is appreciated:

1. Holdings deemed to have an especially attractive long-term risk/reward ratio are of major interest

2. In the same way, internet stocks which have not been run up excessively, but which might become more popular in the longer-term, are desired

3. Issues related to how to manage the unprecedented volatility from an emotional or psychological perspective - this is actually very important since each investor must find his/her own appropriate comfort level to be successful

4. Connected with the above, are there special measures which the highly sensitive investor (aren't we all when it comes to our own money?) can take to handle or to smooth out the possible severe downturns, both financially and emotionally?

5. The huge possible set of internet holdings presents a bit of a problem, so it would be preferred to focus more on general principles and ideas rather than very specific company stories. Yet, a good example can provide valuable guidance in itself.

6. The tone of the discussion is meant to be warm and relaxed - with the goal of helping investors settle comfortably into long-term positions which will achieve high capital gains.

Good luck to all.

J. M.
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