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Tracking the share boom . . . and bust
By David Watts
THE boom -- and possible coming bust -- in the markets for Internet-related
stocks is a phenomenon that requires explanation. Net users have a head start because the
World Wide Web has a staggering array of sites that deal with financial information.
They range from simple introductions to the sharemarket, to those where users can
register, pay a handsome fee by credit card, then trade online in international markets.
Whether they can help answer a daunting list of questions about the commercial future of
the Net in general, and the recent boom in Net shares, in particular, is hard to say. But
this portfolio of sites may help answer questions, such as:
* How can the share price of bookseller Amazon.com -- still to make a profit -- grow from
about $14.30 to a high of $315?
* How can the same company be worth more than the entire US bookselling industry?
* Why should Yahoo -- the search engine that has made only modest profits -- be worth $60
billion? That is more than Boeing and twice as much as Caterpillar.
* Why are Amazon.com, Schwab and Yahoo all valued at far more than the biggest Australian
companies such as News Corp, National Australia Bank and Westpac?
* Why is America Online's market capitalisation bigger than the combined value of News
Corp and NAB?
* How can LibertyOne -- which is tipped to lose $1.2 million this year -- be valued at
$393 million on the sharemarket on its debut?
* Is US Federal Reserve chairman Allan Greenspan correct in saying the US economy cannot
sustain the Net share boom?
* Was the Financial Review's Barrie Dunstan correct in equating the Net boom with our
nickel boom (and bust) of the late 1960s?
* Was the London Telegraph on the right track when it said Net share trading was simply
the latest fashion in gambling?
* Will Net share buyers now start selling as indiscriminantly as they appear to have
bought in the first place?
* How true is the warning by global investment strategist Barton Biggs that the boom
"will come to a very bad end"?
Sites which provide information and expert analysis of the doings of cyber-companies
abound. And they range from those offering simple, free information to ones where payment
is needed for a deeper look at the market.
The pay-for-information sites are best typified by Forrester Research, whose gurus are
often quoted by major news organisations. The Wall Street Journal's interactive edition
has some free areas, but a subscription fee of about $100 a year will guarantee
newsletters, expert e-mail advice and unfettered access to the authoritative American
paper's columns.
Bloomberg Australia offers constantly updated financial news which draws on a global
network of top correspondents. CBS Marketwatch.com -- whose own share prospects are rated
as sensational -- devotes much of its space to watching Net shares and companies. It is
heavily accented towards US markets and offers several links to online traders.
The English bible for the serious follower of economics and business, the Financial Times,
requires registration. But access by logon and password is free. The FT had this to say
about Net shares last week: "Rather like mining stocks, the attractions of Internet
companies are in the form of hopes and dreams concerning the profits that might be made
several years down the line. Current profits, and even sometimes sales, are slight and
conventional stock market valuation methods simply do not apply."
The Australian Stock Exchange site gives an easily-followed menu for the newcomer to share
trading as well as the ability to check prices during the day's trading. It offers a link
to Investor Web, which offers free e-mail summaries of market activity and share tips.
Online fees will get the user more detailed market information in special reports.
OzEmail -- another company whose shares have made a few investors rich -- has a
comprehensive list of Australian sites maintained by financial institutions. The Financial
Review does the same.
From either site it is possible to discover online share trading facilities, both
Australian and international. Charles Schwab and Web Street Securities offer a chance to
invest in the explosive US market. In Australia, E*Trade, Macquarie DirecTrade and
Commonwealth Securities Share Direct (linked to the Commonwealth Bank's site) all make
online trading simple.
E*Trade has an excellent demonstration of how online buying and selling works. Perth
brokers Paterson, Ord Minnett also make the process as simple as filling out an on-screen
form.
All articles Copyright: � West Australian Newspapers |
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Forrester Research
Wall Street Journal
CBS Marketwatch
Bloomberg Australia
Financial Times
Australian Stock Exchange
Investor Web
OzEmail guide
Fin Review guide
Charles Schwab
Web Street
E*Trade
DirecTrade
Share Direct
Sanford
Paterson Ord Minnett
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