"Tim, your post is completely off base, unfounded, and statistically illogical.
"People are getting on with their lives after this horrible disaster. "
The economy was already either in recession, or very, very close to it.
This event will likely push the economy deeper into recession. Companies are not making sales calls (understandably, but still true), consumers are not buying PCs at the usual places (reported by stores), airlines are losing about a billion a day.
"Every single business person, colleague, friend or contact that I know that I have talked to over this event (which goes very, very wide and very far), will be holding their stock. "
Then I guess no one will buy on Monday, will they?
If "everybody" is holding, then there can be no sellers. And a wonderful thing to remember is that the number of sold shares exactly equals the number of bought shares.
The issue is not something ridiculous like "everyone should buy on Monday," as this buy-sell symmetry will of course hold, but whether prices will trend upward or downward, within one's investment time horizon.
I'm betting PC sales skid to a near-stop.
"History has also shown that acts of war have generated extensive business activities which have fueled the economy, not hindered it. Applying $40B towards the combat of war (the amount congress has approved), I believe is equivalent to an entire's quarter worth of VC funding last year. That's going to pump activiity into the economy that will help counter. "
This is the fallacy of thinking the economy is helped if people go out and break windows: more business for the glaziers, more business for Home Depot, more insurance premiums, everyone's happy. Well, no, the money going into replacing destroyed windows _OR_ skyscrapers is treasure (money) that is lost forever.
"I am going to the mall today to shop. Nothing can stop the fact that I need socks. While I am there, if I see one long-sleeve shirt that provides warmth during the more chilly weather we have these days, I'll buy one. "
Good for you, but buying socks and shirts is not the same thing as buying a new big-screen t.v., a new SUV or minivan, or taking airline flights. These things have skidded to a crawl and are not likely to pick up because people want to make some kind of statement of solidarity against Osama.
"I am not selling any stock on Monday. "
Potential buyers better hope _someone_ thinks otherwise....
"For prudent business & financial reasons, not for patriotic reasons (though I am very happy my goal aligns with patriotism), I will be purchasing stocks. Warren Buffett: "buy when the mood is pessimistic, not when the mood is optimistic." "
Even better, buy when there are indications the PC and chip market is not about to tank. I haven't been to Fry's this past week, but I'll bet sales have slowed way, way down.
In times of intense uncertainty about war, terror attacks, and recession, I expect few businesses will be upgrading their PCs. (This was already turning out to be the case, before events of this past week.)
Longer term, as I have said in other posts, companies like Intel may well benefit from higher-bandwidth schemes for teleconferencing. But not in the next several months.
The war that is coming is not the kind of war which causes new factories to be built...this war will be over with before a single slab of concrete could be poured. The Gulf War, with all of the compelling images of Patriot missiles (supposedly) shooting down SCUDs, did not stimulate the economy in any way. In fact, it pushed the country into recession, the recession which cost George Bush Sr. the '92 election.
George Bush Jr. will likely _benefit_ from this war, as he plenty of time for the economy to recover and even boom before he faces another election.
--Tim May |
