John J. Edwards III chatted on AOL MarketTalk on March 8. AOL's MarketTalk is hosted by Sage Online (Keyword: Live).

Sage MikeM:

Welcome back to Sage Online's Market Insiders! Joining us is John Edwards, markets editor of

TheStreet.com

- welcome back, John!

J Edwards:

Glad to be back!

Sage MikeM:

John, what's your take on how the market has been acting the past week or two?

J Edwards:

The market has been sort of struggling to find its way in the last couple of weeks and with the action we saw on Friday, it seems that at least in part the market may be ready to break out of the range it's been in and move to new highs.

Question:

Both uBid and eBay have been up more than 10 percent today. Is this an indication Web auction sites have a strong future, or is this a brief eccentricity of the market?

J Edwards:

It's always hard to say with stocks as volatile as Internet stocks in general and auction stocks in particular, but it does seem there's a lot of enthusiasm for auction stocks, largely because at least in the case of eBay, they are already profitable which is rare for Internet stocks.

Question:

Although e-commerce is still relatively new, what do you see as the bellwether stocks that demonstrate how e-commerce is doing with the public?

J Edwards:

I think certainly Amazon.com has become a bellwether for e-commerce. Stocks like the auction stocks are starting to take on some of that role.

Question:

Is expansion of offerings, such as Amazon's diversification, going to be the key to success in e-commerce?

J Edwards:

It's possible that e-commerce companies will be able to find some measure of success pursuing a variety of courses. The expansion of offerings route certainly seems to be one that will be helpful for companies that want to be really large scale retailing operations, but a strong focus on a niche market can also be successful strategy if the company is able to exploit that niche fully.

Question:

Wal-Mart and Sears have entered e-commerce. Do you foresee their threatening companies that are strictly involved in e-commerce?

J Edwards:

The entrance of traditional retailers into the e-commerce space is definitely going to be a major challenge for newer retailers like Amazon.com and others. I think that it's yet to be proven whether success in off-line retailing necessarily guarantees success in online retailing, but companies like Wal-Mart didn't get to be where they are by being stupid, so we can expect vibrant competition from them.

Question:

The Dow was up over 400 Thursday and Friday. AOL did not participate, why?

J Edwards:

I'm not really sure why in particular AOL didn't join in on Friday except that Internet stocks in general were not particularly strong, despite the rally in the Dow. It shows again the kind of rotational quality we've seen in the market where investors focus on a particular group almost exclusively on a given day, as opposed to rallying the entire market with equal strength. We're seeing that today with the strong rally in the Nasdaq and Net stocks while the Dow takes a breather.

Question:

What would you suggest to a student of value investing -- reads a lot of Graham and Fisher -- and doesn't think college economics courses are the way to go because they teach efficient market theory, beta, etc. So the question is, what major would you suggest?

J Edwards:

It might be easiest to find the kind of intensive courses you seem to have in mind in a post-graduate program, but certainly if there's a finance major offered as distinguished from economics, that might be something to look into.

Question:

What is the outlook for computer companies? Has there been a shift, yet, that suggests some companies may die off and others become dominant?

J Edwards:

We've already seen some consolidation in the computer industry with Compaq's acquisition of Digital and other moves. We might expect to see consolidation continue in the PC group as it is continuing elsewhere.

Question:

Does the increase in the issuance of IPOs suggest a strong market, a speculative atmosphere or a little of both?

J Edwards:

Definitely a little of both. It's often hard to determine where the strong market leaves off and the speculative atmosphere picks up but in general, I would say the strength of the IPO market does suggest confidence in the health of the economy and the health of the market.

Question:

What advice would you give to a beginning investor; not so much specific stocks but general strategies? Would you suggest mutual funds or individual stocks?

J Edwards:

Much of it depends on the investor's goals and needs. I would suggest that a beginning investor perhaps might want to focus more on mutual funds than on individual stocks and investing in individual stocks I would avoid very speculative and risky issues unless you feel that you're confident in the research you've done and are investing with risk capital that you can afford to lose. A good place for beginning investors to get started is with the Basics section of

TheStreet.com

.

Question:

Are newspapers dying or is that merely the perception or prejudice among those who love computers?

J Edwards:

Newspapers are definitely not dying. The newspaper industry is far different than it was 10 or even 5 years ago, but newspapers are adapting themselves fairly well to the new realities of the media marketplace. Some of the best Web sites are in fact run by newspapers.

Question:

Is there a reasonable chance Intel will be dethroned as the top chipmaker?

J Edwards:

It's hard at this point to see a serious challenge to Intel's overall leadership position, but other chipmakers are definitely making inroads into Intel's dominance, which may be part of why the Federal Trade Commission opted to settle its case with Intel rather than pursue the type of antitrust action that Microsoft is dealing with.

Question:

Is there a consensus among Microsoft watchers and government watchers that would suggest there is a genuine chance Microsoft will be broken up?

J Edwards:

The consensus seems to be that a breakup of Microsoft is unlikely but not out of the realm of possibility.

SageMath:

Thanks Mr. Edwards!

J Edwards:

Thank you! Always a pleasure!