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Strategies & Market Trends : MDA - Market Direction Analysis

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Jan 16 4:00 PM EST

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To: Zeev Hed who wrote (79441)	7/2/2001 8:29:30 PM
From: t2	Read Replies (1) of 99985

The survey of the corporation spending plans for technology increasing was interesting (released this morning). We know that companies will invest heavily if they believe that the competition is doing the same. Don't want to be at any disadvantage and that could be a factor for the boom in technology spending by the larger corporations. Call it the "fear factor". Now, we have gone through the reverse; the severe drop off in spending is being called all kinds of names...bottom line is that the CEOs could not believe the degree of the decline. Again, this could also have been caused by the "fear factor" to a large extent. As corporations realize that IT spending budgets are on the increase (as indicated in the survey), those that had frozen IT projects will once again start spending....and we get a boom! Again, the reason becomes the "fear factor", or at least it will be a significant factor. Add the fact that we have a major PC upgrade cycle on the way, lower energy prices, tax cuts and we could get the 3.6% GDP growth by 4th quarter that an economist on CNBC was predicting. It could be a boom once again and may catch CEOs and market observers by surprise once again. Of course followed by a bust much sooner than in the past. Maybe we are just entering a new era....maybe 1998 to 2002 could just be a transition phase. That is a plausible explanation of why so many corporate leaders were just caught off guard by the sudden decline....very unusual. Just a thought.

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