When he finds a fixed pattern in these stocks, he enters the stock early, much before the market could identify the winning stock. A good valuation exercise is based more on an estimate of future potential than on track records of financial success. This valuation tenet holds good for new economy companies. The new economy companies hardly have assets or revenues worth talking about. They bank heavily on their future potential.
Values here depend on the speed of Internet companies and their knowledge of the market.
Keen to arrest cash outflows, they are increasingly issuing shares to settle their bills. The trend is discernible. Swapping stocks for services is becoming popular among Indian Internet companies. The invincible trio seems to be no longer so. The information, communication and entertainment stocks, popularly known as ICE stocks, are on a meltdown.