Morgan Stanley's star technology stock analyst Mary Meeker is a brave woman. Ms Meeker was one of a number of high-profile research analysts who got egg on their faces when they failed to foresee that the 'dot com' bubble would burst, as it did, a few years back. Unlike some of her erstwhile colleagues at rival firms, however, Ms Meeker was investigated for stock research bias by New York state Attorney General Eliot Spitzer AND CAME OUT CLEAN. She simply did not foresee the meltdown of the sector she had, until then, so expertly covered.
And the Morgan Stanley analyst is also the most senior industry figure to come out and express contrition about what happened. She told Newsweek earlier this year that she still feels guilty: 'People did lose money on the stocks that I recommended and I'm very sensitive to that. I wish we would have downgraded them, and I'll have to live with that the rest of my life'.
But why is Ms Meeker brave ? Well, she sticking her neck on the line again and banging the drum for the big internet players. Speaking at the Local Media 2004 conference in New Jersey last week, the analyst pointed to the fact that the combined market capitalization of Amazon, eBay, Google and Yahoo Inc. and Yahoo Japan was $231bn as of last Wednesday. Quite amazing when you think that the market caps of these internet stalwarts was actually only $178bn in March 2000, when the Nasdaq peeked.
Ms Meeker said that 'the enthusiasm (in the internet sector) was well placed, it just got ahead of itself in many respects'. But don't mistake these bullish comments for a general endorsement of the whole sector. Although the internet is playing an increasingly larger part in many of our daily lives, the Morgan Stanley analyst is playing safe and appears to be sticking mainly with the big boys for the moment. But there is also a word of warning here too. She feels that even the big players will need to remain cutting edge and innovate if they are to stay on top and continue to be good long term bets for investors.