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Nuki&#39s Eye

Before getting tucked into my subject of the week – dodgy dotcoms – allow me to congratulate the IFA I happened to be sitting within earshot of in The Savoy recently.

Most striking was his stunning yet economic choice of venue.

His prospective clients – a couple in their 20s – were so impressed that they hardly blinked when he told them that the Grill Room was closed (as it always is at that time of day) and would they mind terribly skipping dinner and just chatting things throughin the lobby?

Better still, he was not alone. At his side was a smart middle-aged lady whose job it was to fill out the fact-find while he asked the questions. Not that this stopped him posing throughout with those two essential symbols of financial respectability – a pair of half- moon glasses and a Mont Blanc fountain pen.

Lest anyone be able toidentify this man, I should say now that he did nothing wrong. It was simply his salesmanship that was striking.

His quarry only wanted a repayment vehicle for a Halifax mortgage. But by the time he had finished they were gagging for quotes on life insurance, PMI and pensions.

“I should stress that there is absolutely no charge whatever for this initial meeting” was the last thing I heard him tell them.

Now back to dotcom stocks, which a not insubstantial number of you IFA chappies have been flogging.

If you know one of these people, I suggest that you creep unnoticed into their office today and shout “Boo” as loud as you can. I have tried it on a couple of businessjournalists in the past few days with excellent results.

The bulls among you will no doubt be telling your clients that the sad demise of is an aberration. The internet bonanza was always going to produce a few casualties but most of the rest will make you zillions.

Don&#39t get me wrong, I love the internet and agree that it will revolutionise the world as we know it but I am equally certain that there are going to be a whole lot more boos to come. Moreover, I don&#39t think they are too difficult to spot.

The first step is to forget the technology and look at the business., for example, sold designer sports goods at the usual high prices.

It is not a bad sector as these things go but it is a crowded one. There is not a high street in the country that does not have a least one shop dedicated to selling the same gear.

If the business itself has no special edge, ask yourself if the internet will provide one.

In boo&#39s case, the pitch was convenience but this should have been seen as tosh from the outset. People who buy designer clothing are image- conscious by definition andare unlikely to buy anything unless they have tried it on.

Since it is not more convenient to trail down to your local shop, try something on and then go back home and order it for the same price on the internet, flopped, as many more people shouldhave predicted.

It seems to me that there are a very large number of internet stocks out there that will end up falling into exactly the same trap.

The key mistake they and their backers make is to see the new technology as a substitute for a good business idea well implemented and well managed.

Unless you personally find an internet service useful, do not advise your clients to invest in it.


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