March 15, 2006

Internet and Railroads - lot's in common

I have constantly been writing about the need to consider the long-term charts of railroads when looking at internet stocks. The basic fact is that railroads and even Fedex are hitting all-time highs despite the massive amount of moving parts. They connect people.

Best performing index today was railroads - up approximately 5 percent. Imagine Google, Yahoo and Ebay 80 years from now jumping 5 percent in one day.

It is a simplistic view, but information delivery over broadband has a lot less moving parts than railroads.

Don't think too much. If you want, buy HHH which is an internet ETF. Internet connects people. MySpace at $600 million last year -probably three nude programmers in a room. That's a lot easier way to run a $600 million business than a railroad. What do you think the leading social network will be worth in 80 years?

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