Dateline: 01/03/00
Revised: 01/08/00
This week we launch our new revised Canadian Internet Index to replace last year's Canadian Internet Stock Average. But before we do that, let's take a look at the closing figures on CISA for 1999.
| Canadian Internet Stock Average | |||
| Dec. 24 | Dec. 31 | Week's Change | YTD Change |
| 4473 | 4496 | 0.51% | +349.6 % |
As you can see, the stocks on our list gained an average of 349.6% if bought in equal amounts at the beginning of the year or after IPO. Read on for details on the new index!
There were 76 stocks on the Canadian Internet Stock Average and it was growing as new stocks were periodically added. Now, in an attempt to have a more stable benchmark and one that more accurately reflects the market for Internet stocks, we have created the new Canadian Internet Index.
There are a number of changes. First the stocks in the Index are weighted by market cap so as to reflect the relative significance of these stocks in the marketplace. But as the valuations of the companies vary from a low of around $5 million to a high of almost $200 billion in the case of Nortel Networks, we decided to limit the inclusion of some stocks to avoid excessive skewing of the indices.
The first thing we did was eliminate what I call infrastructure stocks from our index. These include Nortel, JDS Uniphase, the cable companies, the telcos and the wireless companies. We also dropped the media conglomerates and banks. Most have high market caps compared to other Internet stocks and would skew our index heavily. I'll still follow them, but not in the index.
The remaining stocks seemed to fall into three distinct categories - software, e-business solutions and e-commerce. Software companies are those making software used for web-site design, e-commerce, graphics and other applications used in the Internet economy. E-business solutions providers are companies that help other companies get on-line or provide services to companies online. The field is commonly called e-business-to-business. The third category comprises companies that are making their income directly from the Internet. These include online retailers, portal sites, and independent Internet Service Providers.
I dug around for a few new companies to add to each category so that we ended up with 15 software companies, 20 e-business solutions companies and 25 e-commerce companies, a total of 60 companies. These are each charted together as a whole - the Canadian Internet Index, and as sub-indexes. Originally we were going to have modified weightings, but it was recommended to me that we use exact weightings.
Again I am using i|money to track the stock prices and week to week changes and Quattro Pro spreadsheets to track the indices.
There are some anomalies in the index because certain companies have very large market caps in relation to the index as a whole. The E-commerce sub-index, for example, cocnsists mostly of very small companies plus one huge company - TD Waterhouse. With a market cap of over $8 billion, TD Waterhouse makes up 77.85% of that sub-index. Similarly, BCE Emergis makes up 57.34% of the E-business Solutions Sub-index. So I will list index values that exclude those two stocks as well as the inclusive values where appropriate.
What happens to the stocks that aren't included in the index? The infrastructure stocks and any new Internet stocks developing during the year? They will be kept track of and ones trading at under a dollar will be added to our Penny Stock List. Those trading over a dolar will be included in calculating our weekly Movers & Shakers Report. I'll keep a separate stock list of these stocks and all the stocks in our index. It will be similar to our Penny Stock List with a profile and home page linked as well as a short description of the business and a link to its current quote.
Now let's take a look at our new indexes.
Canadian Internet Index
Software
Sub-Index
E-business
Solutions Sub-Index
E-commerce
Sub-Index
And we know you wouldn't want to miss our weekly Movers & Shakers Report, so here it is:
Movers & Shakers Report for Week of Dec. 27-31, 1999
Additionally, you'll want to check out our last edition of the Canadian Internet Stock Average as well as our other stock lists:
Canadian
Internet Stock Average
Canadian Internet
Penny Stock List
Yankee Stock
List
There is no new profile this week due to the work involved in putting together the new index. But some of the top stocks last week have alreay been profiled and you'll find them here:
Comments? Suggestions? Why not post them on our Bulletin Board or email me.
E-mail me!
ZZZNEWSLETTERSIGNUP1ZZZ
12/30/99 - Carnuck
the Magnificent's Predictions for 2000
That mystical seer Carnuck is back with eight predictions for the
year 2000, one of which is coming true already.
12/20/99 - Merry
Christmas to All!
Along with our weekly Internet Update, I took the opportunity to
wish everyone a happy holiday.
12/16/99 - Musical
Funds
Which mutual fund group was the best performer for November? It
seems to be a game of musical chairs as a different sector excels
each month.
12/13/99 - That's
Doctor Bean!
The Doctor is in! Sideware Systems Dr. Bean Customer Relations
Management software and some key deals send the stock soaring as
we check in with our weekly Intenet Update.
12/09/99
- Newsletter Profile: They Got Mo'!
Our second newsletter profile looks at the momentum analysis
system of The Cabot Market Letter.
Copyright Notice: The mail graphic was taken from Icons For HTML and is believed to be in the public domain. Please advise me if that is not the case.