Internet Stocks - Global Emerging Markets and Strategy

The internet age is global, but it has taken almost 20 years for  it to go truly expand into emerging markets.  I can remember watching CNBC in 1997 and they were talking about the Internet Stocks  PE ratios being stratospheric.

Back in the day, they had a list of the the top California Internet companies.  If you had bought 100 shares of each of these 20 Internet stocks in January 1997, you would be rich. You could have done it with 50 thousand dollars or 25 thousand on margin and probably have several million today.

I also remember when some of these stocks were added to the S&P 500.  There was an amazing run up in volume and price.  However, we all also remember the bubble and the burst.  If you had bought the leaders in 1997, about 1/2 of them would be broke or bankrupt, but he winners would have split and shot up in price so much, that the long term gains would be almost unimaginable.  Examples are Amazon AMZN and EBAY.

Much of the internet growth hype of the 90s was based on demographics and internet usage. The predicted increases in e-business  was fantastic.  We need only to look at the Internet Holders chart to see what happened Symbol HHH  If you analyze this ETF style fund, we see that it invested in top market cap stocks in the internet sector.   However, the problem with this is that the initial inclusion of stocks was based on initial value & hype and not fundamentals.  In contrast, the new winners in the 21st century are usually basing their forecasts  on the number of users which can be monetized in both services and advertising.

In the end, there are winners and losers.  Cyberstocks  with  traffic, eyeballs and customers seem to drive potential prices.  If any analysts looks at ALEXA.com, you can see the names of the websites and where  the internet  traffic is going around the world.  This is why potential valuations of some new companies are so huge is that its visitors, users and brand is so big on a regional and global scale.

Now, back to the USA.  In the last 15 years, there have some been clear victories by web companies.  Take a deep breath and think of these sectors:   travel, education, jobs, auctions,  games,  networking, service providers  etc.    AMZN, Monster MWW, Priceline PCLN,  Internet Education such as DeVry Symbol DV and University of Phoenix Symbol APOLand so forth .  What about GOOG Google and  Facebook. These valuations are truly amazing. Also, we now see the winners diversifying into many other areas.  Remember, 95% or more of Google revenue was from advertising up until recently.

The big winners in the USA can translate to winners globally in other countries with key demographics.  Have you seen the Stock- Chart for BIDU, which the Chinese Seach King,  over the last 5 years?  What about MELIwhich is the Ebay of Latin America.  What about  Rediff symbol REDF which is the local based web search and news in India?

With  a billion or more people in each major region such as: India, Arabia, Asia and with a large Spanish speaking population worldwide, there is vast potential with internet stocks that are traded on the US and global markets.  Many of the best internet stocks from other countries are listed on the NASDAQ and New York Stock Exchanges.  Thus, we can all invest in this expansive, global internet gold-rush.  Even if you can't buy a stock that you want on the US exchange, there are many ETFs and funds that may hold the offshore company  stock inside of their fund.

Happy Hunting.