Cramer: madness as K formation

Doug Henwood dhenwood at panix.com
Sat Sep 25 12:51:39 PDT 1999


I nabbed a copy of TheStreet.com color commentator James Cramer's speech listing the Top 10 Internet Myths. It's 36k, and I'll send it to anyone who asks. The former net hyperbull says in it that the boom wasn't capital formation, it was madness.

His point #7:


>[Myth:] It costs nothing to get a site up and running. Forget it.
>These days, almost no one but the richest companies can afford to
>staff a new large-scale Web site business. We lose a programmer, we
>can hardly afford to replace him. Just to hire an investor-relations
>professional costs us hundreds of thousands of dollars. The market
>for Web professionals is so thin that you have to pay fortunes to
>get anybody with a brain and then top that off with a hefty dollop
>of stock options. And once you get them, they tend not to know as
>much as you thought they did! It is expensive to open the doors
>every day. The labor shortages and labor costs for the lowest level
>programmers and execs are totally out of control. Just mind-boggling.
>
>(In truth the labor inflation is scary. There is now a barrier to
>entry. It is hiring quality people. They just don't come cheap.)

Doug



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