Well, howdy do Jay. So nice to chat again after all this time. May your days be long and your life filled with serendipity. I did enjoy your last rant [10 March] and in fact, I did sell a bunch of Q! on 12 March which avoided the necessity of me being forced to sell at later lows. I think your comments gave me just that extra prod I needed to lighten up. So, the cheque's in the mail in appreciation.
But enough sycophantic admiration [you probably don't want a big head and it would be unkind of me to inflict it on you].
My call for a renewed boom remains in place. Not that the dot.coms will be resurgent, but the whole panoply of virile, rampant technological development won't miss a beat and continues to accelerate as you read this.
For example, QUALCOMM's share price remains bumping along the bottom, but their technological developments, market gains and promise for the future continue to grow by leaps and bounds. That's similar for many companies although their bottom lines have been tightened up somewhat. But hidden above those bottom lines are blossoming R&D budgets and technical results which will pour riches across the planet and back out into the bottom lines.
We are witnessing one of the world's great tidy-ups in financial systems as overly indebted and wildly optimistic people come back to earth, faulty companies go bust [such as my beloved Globalstar] and housekeeping is done. Housework is not the fun part of life, but it's essential to keep things tidy and functioning. Globalstar for example, won't go away. The capital hasn't been destroyed. There has just been a one year opportunity cost due to bad management. The new owners {QUALCOMM mainly] will capture that capital which is forfeited by the incompetent previous shareholders who failed to sell the system properly.
Similarly for the multitrillion$$ market cap destruction. That wasn't actual capital destruction [not all of it anyway]. Mostly it was just a sudden bidding up followed by a rapid bidding down. Which just means the money changed hands, not that there was actual destruction. Those $$multitrillions weren't wasted in building white elephants, though a $100 billion or two of white elephants were built.
Somebody buying at the top surely thinks there was capital destruction, but their payment went to somebody who still has that money. None of it was destroyed. The only destruction is the people working day and night on stupid ideas for Internet nirvana. Even the $100 billion given to European governments for spectrum isn't wasted [if you believe in democracy and that voters know what's a good thing to do with government money - I'm one who thinks it's largely wasted].
On Alan cutting interest rates to give the economy a boost, it always seems that those lending money are going to feel very glum with their returns being hacked to ribbons. They will have cancelled various spending plans. So not only are the borrowers chastened and frightened, but now the lenders are damaged too. So it seems odd to me that interest rate cuts are considered to be economically stimulating [though the experts all say they are so I guess they know what they are talking about]. I certainly like having my interest rates cut [being a debtor] and I had planned on that happening a couple of years ago when this crunch arrived, which I have been expecting since May 1999 - it took long enough. But the interest rate cuts are small compared with my damage in stock declines, so I'm not spending up large even with interest rate cuts. And neither will the lenders be overjoyed.
Kiwiland real estate is cheap. You can come from Hong Kong, USA and many countries and buy up large for little of your real money and hire servants, restaurants and hotels at low prices.
Well, I was just looking through what you wrote to find something I disagree strongly with [for the sake of arguing] but didn't find much at all. I think the essential difference is that you think things will get worse than I do and for longer. Though we don't have a measuring stick to define 'worse' and 'longer'. Maybe we agree and are just using different words to mean the same thing. Anyway, I sold more Q! at $69 during the recent market [dead-cat?] bounce, so can take a major price drop now and still go shopping any new bottom [albeit on borrowed money].
Mqurice |
