<You do like doom and gloom. Your profile is doom and gloom. You live off shore. You list some money under the mattress investments like gold?>
Ho ho ho... <Canadian oil&Gas trusts,CLTR,HM& other GOLD stocks,QCOM,BGO,INCY,CGPI.>
... my style is partly 'contrarian', and I think you'd agree that you can't get any more negative than the market is right now on gold. Note also quite a fine year being racked up in my Oil and Gas Trusts that were being given away 18 months ago! Nice balance to my 'tech', I must say. Jeez, if this is doom and gloom...
< They were drilling wild cat drills through thousands of feet in farmland throughout Dakotas, Wyoming, Montana (a very, very expensive drilling process) to suck out old dinosaur innards.>
Yes, the contrarian play certainly worked then didn't it? It's also the only time I can remember so many buyout's and mergers in one industry.... till... well, CSCO et al, now. hmmmm
<If you can quantify and qualify that the economic situation today is similar to the 1970's, then more power to you.>
No I guess the point is that it may be valuable to see what happens to a 'Gorilla' when times aren't so 'rosy'... if you think that possibility is zero, then why bother I guess... looking for charts and revenue growth numbers on INTC through a less rosy time nonetheless. May or may not be useful. Interesting note that virtually none of these companies has been through a recession... that's typically when good equities are 'given' away.
I agree with all the internet related investment you are sighting... in all areas. But I would say, what's driving the investment, and where are the eventual 'returns'? What worries me is that the answers to these 2 questions don't match up... ie. returns are not driving the investment. The investment is being driven by perceived future returns and the fear of being left behind, and has been funded by stock and bond sales into a willing market:
< The IP/Broadband companies see robust demand being fueled by corporations desire to conduct business through e-markets on the buy, sell, portal and content sides.>
The returns on those investments have not shown up yet as can be seen by the cash flow numbers of the carriers [vast majority are negative], B2B, and B2C companies.
So to sum up... IMO the answer to returns, which must surface for investment to continue must come from consumers, either directly or from companies who sell to consumers... all this while the consumer is right now as well off as he's EVERY been measured by his spending and infact is at an unsustainable level of consumption... meanwhile stock prices of the best companies are not cheap. A stock with a 100 PE growing at 20% per annum takes 13 years to grow it's way into a mature value stock with a 10 PE assuming a flat stock price. That's a lot of growth for a sector that is already a very large part of the economy as has been pointed out earlier.
I know many arguments here are not new... and when strategies are working there appears to be no reason to doubt, but when the vast majority of techstock holdings are by folks who have institutionalized their decisions [for the time being?], simply because it's been working, creates a situations where 'space comparison' is the only options as opposed to asset class comparison. Something to be aware of in any case... Uncle Frank's point is right, these stocks have been driven by liquidity as opposed to value, IMO that begs the question: what if?
DAK
DAK |
