From: John Conover <john@email.johncon.com>
Subject: Re: Speculative bubbles and internet stocks
Date: 18 Aug 1999 17:30:34 -0000
PATONMR@apci.com writes:
> Are Internet stocks over valued and is this simply another speculative
> bubble?
>
> I read this week that the market capitalisation of Yahoo is greater then
> Boeing. Given that the tangible assets of these Internet companies are
> almost insignificant and that few if any have declared profits. The
> valuation is therfore (obviously) based on expected future returns. In a
> market where no significant barriers to entry exist, expectations of
> profit must be far in excess of what can ever realistically be achieved.
>
The answer is probably yes. But it is not unusual-the market has tended
to run about 15%-25% overvalued for most of this century, (depending on
who is telling the story.) There is some information at:
http://www.johncon.com/ntropix/FAQs.html#bubbles
and some links at:
http://www.johncon.com/ntropix/links.html
John
--
John Conover, john@email.johncon.com, http://www.johncon.com/