The Internet refers to the World Wide Web, which is the familiar “www” prefix found in all web site URLs. The Internet is one of the top innovations over the last few decades, and it has become a critical platform for both businesses and people. The significance of the Internet in the global marketplace is only expected to grow going forward.
Internet was last modified: September 17th, 2013 by admin
As I have recently discussed in this column, I am positive on the technology sector, yet there is also some obvious froth in these stocks, namely in the social media space.
My freshman son in high school is currently producing a sports blog that I admit is pretty good. In less than a week since going live, his blog has more than 40 unique visitors.
At the beginning of the year, I thought the technology sector would deliver some of the top potential for gains this year.
Nearly two months into the year, the technology sector has, so far, made the biggest strides in what has been a relatively cautious start to the year.
So far this February, the technology sector is leading the broader.
We all know about some of the insane valuations with social media and Internet services stocks, such as Twitter, Inc. (NYSE/TWTR), Facebook, Inc. (NASDAQ/FB), and Yelp, Inc. (NYSE/YELP), as I have discussed in these pages before. (Read “Two More Internet Stocks to Watch.”)
These valuations make it extremely risky to buy, as a change.
The stock market may have staged a decent rally last Thursday, but it’s not enough to convince me that the worst is over. In reality, I think there are more downside moves and opportunities to buy on the stock market ahead.
The Dow, S&P 500, and NASDAQ are down by about four to five percent, so it’s really not a stock market correction.
As momentum play Twitter, Inc. (NASDAQ/TWTR) plummeted 24% to $50.00 last Thursday morning, my response was—it’s about time.
Here’s what I’m thinking: the superlative price spikes in social media Internet stocks in 2013 were truly obscene; in fact, I think the extreme buying was overdone.
The sell-off in Twitter last week.
Immediate term outlook:
The bear market rally in stocks that started in March 2009, extended because of unprecedented central bank money printing, is coming to an end. Gold bullion is up $1,000 an ounce since we first recommended it in 2002 and we are still bullish on the physical metal.
Short-to-medium term outlook:
World economies are entering their slowest growth period since 2009. The Chinese economy grew last year at its slowest pace in 24 years. Japan is in recession. The eurozone is in depression. With almost half the S&P 500 companies deriving revenue outside the U.S., slower world economic growth will negatively impact revenue and earnings growth of American companies. Domestically, America’s gross domestic product grew by only a meager 2.3% in the second quarter, which will negatively impact an already overpriced equity market.