Lone Star, I see this overcapacity hanging on until the Y2K problem is solved or over, which means 2 to 4 years. And, at that point, most of the high flyers we know today will either be gone, lower probability, or last cycle's story, higher probability, or a mix of the above, highest probability. Then a new generation of folks with great ideas will bring out their cos. and some will succeed beyond our wildest dreams and they will be the next move up.
I don't doubt that IT will grow rapidly. It always has and always will, ever since the telegraph. I just doubt that most tech cos will continue to grow with it. I think most will be left behind, as they always have been before, so paying up for them at this stage of the bubble is just a scary act. If you look back to the 1970s, it is hard to find many cos. that were big players then who are big players today AND whose stocks have been leaders. My list sort of begins and ends with Hewlett-Packard, Computer Sciences, Texas Instruments, and Motorola. Others have joined the also-ran category, such as IBM and Dec and Varian. And many others are in the barely running at all category, like Apple. And a great many are gone, like Mohawk, National Equipment Rental, and Commodore. These were all hot cos. and stocks at one time. There were 100s of them, and if I had to list 10 who made it as stars from the seventies to the 90s, I would be stumped.
So, IT is wonderful. But as investors, we have to be aware of when old stocks are overpriced and keep an eye on new innovations or efficient competition that threaten these old cos.
I think the next move will be to make IT productive, and whoever makes it cheaper, more useful, and much more useable will be golden.
Right now, I see few cos shooting at that goal. MB |
