Mea Culpa Monday

When you crank out five columns a week about Internet stocks (or five columns on just about anything), you’ll inevitably a) make a few mistakes and b) arouse the ire of some readers. I’ve done both recently.

Last Tuesday I noted that CEO Jeff Bezos, appearing on a recent British news program, had warned small and short-term investors to avoid Internet stocks. Good advice, which I lamented would have been more timely some months ago. A couple of readers informed me that this wasn’t the first occasion in which Bezos had cautioned investors about ‘Net plays.

One recalled attending a heavily covered event at Stanford University in January 2000 (pre-meltdown) at which Bezos offered that “ stock is overvalued” and that “being an individual investor, I would not put money into Amazon.”

“Some of my friends and I were clearly surprised to hear Jeff Bezos talking like this about his own company,” our correspondent wrote. “I actually believe that Bezos tried to warn investors even during the time when Internet bubble was still expanding.”

Apparently Bezos’ comments were reported at the time, but I either missed them then or just didn’t recall them last Tuesday. Sorry, Jeff; you deserve more credit for calling ’em as you see ’em during a period when many Internet CEOs were still inhaling helium and encouraging investors to do the same.

Regarding the second item mentioned at the top, a column I wrote Feb. 21 came back to haunt me just last week after it was posted on a stock message board, creating a hornet’s nest of resentment and a stream of flames to my e-mailbox.

Ironically, I was actually trying to point out some good news, namely the strong year-to-date performance of a handful of Internet stocks. The biggest YTD gainers, I observed, were five stocks that began the year trading under $1 per share. I then added the following passage, which elicited a ticker tirade:

“The fact is that most investors wouldn’t look twice at any of these companies, since most are on life support and not likely to be around to play this game a year from now.”

Besides the fact that I clumsily used the word “most” twice in one sentence, I didn’t see a whole lot to object to there. But several loyal investors in V-One , the VPN vendor that topped the list, took me to task for generalizing and being overly dismissive.

Of course, they didn’t put it quite that way, but their criticism is fair. What I should have written (and what went through my mind at the time) was that most of the companies cited likely wouldn’t be around next year because they would either go out of business or be acquired. There’s a big difference between those two outcomes (just ask eToys). I should have made that distinction, and regret that I didn’t.

Maybe VONE someday will grow to challenge VPN market leader Check Point Software. Maybe it will be sold next week at a price that will thrill most current owners of V-One stock. I don’t know and, if they’re honest about it, neither do V-One shareholders.

It isn’t my job to be right all the time. Nobody could do that. Columnists are supposed to be provocative, interesting and informative. But they also should be thorough and explain their thinking clearly. I agree that I fell short in this case.

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