Interesting choice of words -- "ripped apart." If the "new" economy companies are ripping apart the "old" "
I cannot recall where I first encountered the idea--in this thread or....--but it has been pointed out that the "old economy" companies are not stupid. And, they have infrastructure. When the history of this technology boom is written the "new economy" will be curiously populated with "old economy" companies.
I, for one, do not subscribe to the dichotomy--'old e' vs 'new e.' I think it is a false and misleading concept. The real factors will be what they have always been: businesses that deliver actual growth will be valued most frequently within the historical range; and, when valuations stray from the historical range, there will be a correction; and those who bought high will suffer when the correction occurs. To assert otherwise is to ask us to suspend all notion of historical precidence, on a massive scale. To talk of 'old' vs 'new,' is to miss the point and to sumit to a form of beguilement and thrall. I contend that most "new economy" companies will no longer be around but most of the old will, when the history of this bull and bear is written.
I read the following in the recent issue of Canadaian Shareowner magazine:
"Speculation begins when a price is going up and the presumptively wise expect a furtyher increase. They buy and thus produce the increase. More buy, and more, and yet more are attracted. Each price increase affirms the good sense of those who have bought before. Those who doubt are reviled as creatures of defective inagination. The buying and the supporting mood continue until the available supply of mentally vulnerable, economically viable buyers is exhausted." (J.K. Galbraith, 'A journey through economic time', Houghten Mifflin, 1994)
Ciao from a creature of defective imagination, or, as I've been dubbed on the JDSU thread: The Thread Pariah,
David Todtman |
