The Internets really went nuts today, and I have no good answer. But I will make some observations. Of the 15 Internet stocks I follow, AOL was up 18 5/8 and Yahoo was up 70 7/8. I know there are other wacky examples of Internet fever, but these two show plenty.

The market cap's of these issues are fast becoming enormous. If my ears did not deceive me, I heard that the market cap of Yahoo was only 1 billion less than that of American Express. Maybe when you start to lose your mind, these are the kinds of notions you get. A very good market hound friend of mine told me a real horror story today. About one and a half years ago he bought 1000 shares of Yahoo at 17 and another 1000 at 25. He sold both at a 1 point profit before commissions. I remember when he bought them and sold them; the 1 point gross gain wasn't unusual, as the purchase was made for a short term trade.

The stock has since seen two 2 for a splits, meaning that if he held on for 1 year, he would now have 8000 shares. So today's stock gain means he "lost" 560 thousand in 1 day! Also, the market value of his holding would be 3.3 million! What can you say, and when will this madness end? Unknown, except that manias last a lot longer than anyone expects. I like my tulips medium rare.

Today saw the Dow Industrials down a modest 23, after having been down 80 twice during the session. The Nasdaq was up 40 at another new record, thanks largely to the Internets. The market is bound to have some profit taking, but this Bull is alive and well. Stay tuned.

The Market Pro - January 11, 1999