Gilbert -
...The other point that play against HAHAHA ! is that in the long term the return on capital tend to be equal for all economic sectors. In other words, if the return on the digital economy sector is at 20% and that the one of the resource sector is at 5%, the economic factors will force the participants of this latter sector to adjust to increase their return of capital (mine closure, better technics and projects and so on.) In the long term, the return of digital economy should go down and the one of the resources sector should go up. Because we have witnessed the crash - in part - of the digital sector, I conclude that in the next 5 years, the resource sector could be the sector to be in.
The long term return on risk capital is likely to be at least negative, if not -100%, even before inflation, when all participants are included. Consider aviation and the airlines, for example. Profits are always a transient aberration.
Regards, Don |
