Softie:
I can't argue against the valuations - I've done a little shorting here myself - but remember, the seeds of every recovery are planted in the excesses of the previous cycle.
For example, the 1990-1992 downturn was characterized by massively overbuilt real estate, particularly office space, but also shopping malls, warehouses, hotels and light industrial space, and a big downturn in defense spending as the cold war was over. Construction companies and defense contractors shed workers like the telcom sector is now.
The office space glut basically subsidized all the start-up technology companies with cheap rent, and defense workers and engineers ended up in high tech.
Something will come along to exploit the surfeit of fiber (depending on who you read, as low as only 5% of the fiber in the ground is being used), just as office space got used.
Or, that is my view anyway.
My family is feeling this personally, one close relative laid off for months with still nothing going and another accepted shocking pay reduction after asbestoes litigation forced company into bankruptcy.
To be great stock pickers, we've got to figure out which industries and companies will absorb this available brainpower and resources.
gm |
