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Strategies & Market Trends : Booms, Busts, and Recoveries

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To: LLCF who wrote (7345)8/18/2001 4:14:07 PM
From: GraceZ  Read Replies (1) of 74559
 
I was talking about the money that was originally invested in Juniper, not about the inflated value that the market put on it after it IPOed. An enterprise has a value which is not necessarily reflected in it's stock price. It has the ability to create revenue streams. I certainly wouldn't recommend it as a stock to buy because the market put a value on it way above it's projected free cash flow. I submit to you that the value it added to the wealth of the nation still exists even if the company goes belly up. The value of an enterprise like that extends far beyond it's own balance sheet, something money stored in the form of gold never will do.

As far as real estate goes, at this time it looks like it has been a very good investment in the last five years. The greatest thing about it is that you have leverage using OPM, but as The Donald can tell you, that leverage cuts both ways. My point was that raw money doesn't create value or wealth, neither does raw land (although you might have had a hard time convincing someone who owned land in Tokyo around 1985 of that truth). The wealth or value is created when people do something with it.

BTW- The last time someone tried to convince me that real estate was a far better investment than the stock market was right around 1988. The rest, as they say, is history.
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