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Gold/Mining/Energy : Gold Price Monitor

GDXJ 109.28

+3.8%

Nov 28 4:00 PM EST

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To: ahhaha who wrote (40309)	9/15/1999 7:47:00 PM
From: Ken98	Read Replies (1) of 116790

<<The financing in this era is equity more than debt. This has had the undesirable effect of driving stock prices to unsustainable excess because there is such demand for equity funds to grow the tech infrastructure. >> This also has the additional undesirable effect of (over)funding numerous unproductive, and in some cases just plain silly, business enterprises. Witness the many internet and CLEC enterprises that will require fresh injections of capital to merely continue their existence, much less ever returning a profit. Many of these enterprises could have NEVER been funded with debt capital because most debt investors (even the junk variety) would have kicked them out the door with a resounding hell no. Only in the waning days of a manic business cycle would these enterprises be funded at all, much less with straight equity capital. When the virtuous cycle of equity capital flowing like water ceases and these enterprises have to obtain additional capital to continue, they might get a chilly reception from the debt markets. One thing that the equity investors in these enterprises have forgotten is that they (the equity investors) get the back tit at the end of the day after all of the debt holders get paid. This is a lesson that the Iridium investors learned first hand recently. "But, but Forbes magazine said that 'it was impossible to go broke overestimating American's need for self-indulgence......'"

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