BIADU spells NETSCAPE in Chinese

August 6,2004

Hello,

Ok I have held my tongue long enough, if Jason Giambi can make a come back so can the stock market. Jason has gone from the scrap heap of the steroid scandal, “Mr Washed up” to the New York Yankee player of the month in July batting over 350 and connecting on 14 home runs.

Incidentally while you were away on your summer vacation and in case you missed it, the last 8-6 weeks have been the best trading weeks in 5 years. Yes I know not all stocks are up but now for the first time since the turn of the century, the turn of the millennium and the turn of the decade, the bull market has resumed and stocks are going up and now we have a chance. Yes I know I never though it would last this long, I thought things would pick up much earlier. Earnings and productivity growth looked like they would be enough. Unlike many other market analysis columns, I take my swings and analyze my mistakes. Unfortunately often it is the failures that you learn the most from. Some times you can be in the right place in the right sector but the timing can be slightly off. Sometimes you can buy the same investment for hundreds of investors and show different returns for each one. In recent years we have gone from what I would call an almost instantaneous response to events by stock prices to a more cynical delayed response suggesting an extreme distrust of information sources. This lag has altered significantly the stock trading landscape. Some stocks seem to suffer by what I would call the believability factor, no matter what the results suspicions abound, and while other stocks seem to gain instant credibility no matter what their results.

It is just about 10 years since the NETSCAPE IPO. It was clearly the IPO that changed the world; bringing the internet to Joe and Jill six pack. The real impact of the internet on how we live and work is just beginning to be felt. In the post bubble world we all have a tendency to forget how special the advent of the internet really is. The internet gives us information at our fingertips, the ability to customize solutions at a mass produced price, setting us free to compete with much larger competitors, transforming almost every sector of the economy it touches. Don’t think so, think about the world before the internet; astonishing isn’t it. On the other hand, recent rallies in Chinese internet stocks such as BIADU or rallies in GOOGLE seem to be a reminder of the bitter taste of past follies.


James

www.jamesfoytlin.com