KB, I'm in agreement with your view of continued innovation and integration of information and communications technologies into mainstream life. Let me have it if I've put words in your mouth.
I should have disclosed my bias upfront, as an accountant by training and former profession. As such, I value businesses mainly within the framework of the "discounted present value of future cash flows".
The information and communications technologies businesses are shaping up to be extremely crowded and competitive, with quite free competition. This suggests an ongoing trend of margin compression to me, not in line with the still high valuations existing (generally speaking again) compared to any historical norm. Add this to the numerous other structural issues facing the industry, which have been noted.
Capital markets have seen many revolutionary technologies enter economy and our lives. Ongoing innovations, refinements, and improvements in respect to these technologies have not necessarily equated to entrepreneurial enrichment. The financial models have everything to do with how well business owners fare.
IMO, highly informed investors who've done their research and reached solid understandings of the businesses, their technologies and markets can and will find superior investment opportunities. That's why I've written down all posted choices of the esteemed group here, and am thankful to have them. But this notion of success by applying limited knowledge and buying the big names because they will serve as the liquidity magnets going forward???
As far as NASDAQ Comp. targets, etc: I think that the financials and banking system may be sicker than most are willing to admit. If the financial components of the index start taking a hit, we could see new lows made based on other than tech-specific problems. The aggregate valuation of the NASDAQ 100 (and QQQ's) continue to speak for itself.
Aside, I've been worried about inflation for some time now, and that concern is growing. The risks for an inflationary resurgence have screamed and moaned with each new printing press that the Fed. has left to run. The universal consensus that inflation has gone the way of the dinosaurs is also troubling to me in that the enemy's attacks are often most successful when nobody is watching.
We can all see that gold prices are down and bond yields are punk, so the classical signs are absent. Are world Central Banks that continually sell gold and buy U.S. financial products another permanent part of the "new era"? I'm quite interested to know if others here are concerned and if so, thoughts on appropriate investment themes.
IMO, if the marketplace begins to fret over inflation we can forget about a NASDAQ snapback anytime soon.
Best Regards |
