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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum
GLD 414.48+0.7%4:00 PM EST
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From: Seeker of Truth6/18/2006 8:30:56 AM
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1999 vs. 2006
The tech boom fans, like me, assumed that since technology was the only game in town for rapid growth then that was the place to invest. I remember too clearly that Tobago Jack (then using his real name, i.e. Thomas Sawyer) pointed out, with too few listeners, that competition was at its most intense precisely in the fastest growing arena. Nobody had a real permanent monopoly. Nasdaq was around 5000 and he predicted 1800 or less.
The relative better performance in BRIC compared to stocks of the developed world(other than oil) reflects, I think, a very long term trend. Of course there must be a limit on the relative prices that we wish to pay. For example the best Brazilian bank might reasonably sell for a higher P/E than a US bank, but not three times or five times the P/E. The scarcity of capital in the rapidly developing world considerably protects us from competition on the ground there. But we are not protected, other than by our own good sense, from joining any mad rush to buy Brazilian,Indian etc. shares at any price. In short, my view is that we are seeing a major correction, not a collapse a la 2000 in the tech stocks.
I welcome any contrary arguments.
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