posted 10-22-1999 10:43 AM         

---

James,
If by indefinitely you mean forever, then the answer would be no. The value of a stock is based on its expected future cash flows. If they company never had any, the stock would be worth nothing except the psychological value or whatever other happiness/sentimental value it brings to the owner. Another part of the value the owner gets is voting rights, but individuals rarely own enough stock to make that worth anything.

If you are arguing whether internet stocks continue to be valued highly by investors even if they are in the red for many years then i'd say you have a good argument. Investors are beginning to ask lots of net companies when they are going to be profitable, but there are enough forward looking investors that they are still willing to buy the stock while its money-making days are many years away.
I'm not saying this is definitely a good investing strategy, but it is one that enough investors are using that it causes these stocks to keep going up while posting losses.
Good luck in your arguments/discussions with friends. Go ahead and bring the discussion on investorville as well if you like. We enjoy these types of discussions here.
charlie

All times are EST (US)