Re: Bill Fleckenstein's article,
Thanks for posting a link to an interesting article. I'm generally a pessimist, so I found it very enjoyable :-)
I can't claim any special knowledge regarding your question, but I pulled together a few data points that might be relevant.
In July of 1997 (as close to 2.5 years ago as I could quickly go on a Sunday night) Micron's add in Byte had Business Desktop PC's ranging in price from $1,959to $3,499 (all including monitor)and home PC's for $1,599 to $2,749. Dell had business Desktops in the same issue for $1,999 to $3,499. Tiger direct had an add for for a PC for $949 without monitor. (200MHZ and 64meg of RAM was the ultimate system, back then).
Now you can get a home PC for about $500 on up (I don't think those $400 rebates should count towards reducing the price - the money still is paid in the form of overpriced internet access). But sales of such machines (I believe) are in addition to, not instead of, the traditional home and business PCs.
My WAG estimate is that the typical business desktop and traditional home PC unit price is down by about $1,000 in the last 2.5 years. But unit sales are up in the US and up a lot in Europe and Asia - by how much, I don't know, but I think by enough to more than overcome the unit price decrease.
One interesting piece of information reported by Business Week shows year over year sales for semiconductors up 21%, office equipment up 20%, and computers and peripherals up 18% for the most recent quarter I could find numbers for:
businessweek.com
So total sales were still growing during this period that saw the advent of "Free" PCs and price wars in CPU's and memory. I don't have similar numbers for non-US companies, but I am confident the Taiwan, Korea, etc, have had their sales growing at a faster rate, not a slower one, as their share of semiconductors, motherboards, hard drives, and other component sales increases.
There are a few other things in his paper that I am skeptical of:
Savings rate - the "official" savings rate doesn't include capital gains, it's a statistical anomaly. The actual savings rate is considerably higher - that huge increase in the valuation of the market is treated as though it didn't exist, and that applies to proceeds from a stock sale or home sale that resulted in a gain and was then put into a savings account, not just paper gains in the market.
On the other hand, I agree that this market is overvalued - especially rambus :-)
Seriously, the dot com stocks are priced way too high, and even most industrials seem too expensive, but not outrageously so.
>>>"The 1929 crash exposed in addition the naivete and ignorance of bankers, businessmen, Wall Street experts and academic economists high and low; it showed they did not understand the system they had been so confidently manipulating. They had tried to substitute their own well-meaning policies for what Adam Smith called 'the invisible hand' of the market, and they had wrought disaster.
His point about the 1929 crash exposing the ignorance of bankers is well taken, but he doesn't go on to complete the thought: The trouble was, they cut the money supply, the opposite of the action taken by Greenspan in 1987, we know better now. We have learned some things since then; Friedman's reassessment of the impacts of monetary policy on the depression has taught us quite a bit. And the information technology of today provides our current bankers with a better picture of what is really going on in the economy. They needn't be any smarter, better data has made their job easier (though a fool can always screw things up).
His point about distributers like Ingram, Tech Data, etc. not doing very well is most likely due more to a transition away from the that channel into direct sales than a decrease in total sales - although I can't back that statement up with any specific links.
Just my take, your mileage may vary, etc.
Regards, and thanks for posting that link on Nintendo's DDR use, I could find only the garbled "embedded DDR" link, but knew I'd seen better info somewhere.
Dan |
