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Stock Strategist

Have We Learned Nothing About Risk?

Stocks are due for a pullback.

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"Experience is that marvelous thing that enables you to recognize a mistake when you make it again."   --F.P. Jones

Despite dropping 9% the day of its second-quarter earnings release,  Yahoo (YHOO) sells for almost 100 times its First Call 2003 earnings estimates and more than double our estimate of its fair value.  Amazon.com (AMZN) has a share price that is about 85 times forward estimates and almost triple our fair value estimate.  EBay (EBAY), the golden child of the Internet, trades for 78 times forward earnings estimates and 45% higher than our fair value estimate.

Mark Sellers does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.

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