It is down 3.8 percent so far this year. This spreads the risk somewhat of losing money fast should Internet stocks suffer another market wreck. Many Internet companies, he suspects, will not survive the shakeout in the industry. That's especially true of firms providing retail services to consumers. Even those firms aiming at providing services to businesses may find that customer companies set up their own networks, and no longer need their services, Mr. Perry adds.
Idiots can get money.
But competition is a powerful force. It weeds out the weak. Already some Internet companies are finding that getting a second or third infusion of capital is difficult, if not impossible. Over the longer run, Internet stocks are expected to benefit from the high growth of the industry. There is no significant slowdown in information technology spending this year.