INTC, TXN, etc. have had strong results, for instance
And IBM plans to hire 10,000 people in 2004.
We obviously need more jobs to keep the GDP growing
True. However, with increasing efficiency and automation in production sectors, not so much an incremental increase in employee headcount is necessary anymore for higher capacity utilization. In service sectors, which I believe is most of the US, it will not be impossible to see significant increases in revenues without a meaningful increase in the number of employees.
In the medium term, of course, a company with better prospects hires people and expands.
In the long term, I have doubts about the US job markets - Americans are paid much more than their peers overseas. This took a toll on production, and now it is coming to service sectors. Already, Silicon Valley is complaining about jobs going to India, rather to American programmers.
I don't know that much about the workings of the US labour market, but it doesn't look like a happy recipe to me.
My bets have been in Japanese small company growth and emerging markets
I feel very uneasy about markets where I don't understand the local language and hence am at the mercy of some analyst's understanding of the company's accounts. I have had limited exposure to the Japanese market - only a couple of large caps and the currency, of course.
Emerging markets have been very good to us, as well. In Turkey, for example, we did a six-month USD/TRL forward and made 30% in USD terms, but only after we held their t-bills three months for a profit of about 35%, again in USD terms.
Our most important recognition for this year was that the US would drive down the value of the USD - we have been heavily shorting the USD on and off since November 2002, when Fed governor Bernanke gave that infamous speech about printing money, whereupon we immediately got gold religion :-)
They still look hell-bent on depreciating the USD. The only question is how fast and how much. That is another reason why the equity markets should be under pressure - not many people I know want to remain in USD assets while the country continues to do all it can to devalue its own currency against others... |
