Mark,
I don't really know. A lot--no, a huge amount, not just a "lot"--depends on what kind of ambitions companies like Fujitsu and Samsung have, and if they are allocated the resources to act on those ambitions. Do they want to make an assault on the drive business like they assaulted the DRAM memory business? If they do, then investors in these businesses (that is, legitimate private companies) are toast, because they won't be competing against a company which has limited resources, they will be competing against a country where failure--that is, losing money--doesn't have the consequence that the business goes under. Now perhaps Japan is finally learning that they have to change, that prices can't keep going up for real estate, and they can't keep selling things for tiny profit margins. Perhaps. I'm not sure. I doubt very much if Korea believes this--in the article I quoted from a couple of days ago (or was it just yesterday?), some Korea said something like they don't need lectures or conditions from the IMF, they just need cash. Nothing is wrong, as far as they are concerned. But actually, there is plenty wrong, and if the IMF allows it to continue, they will just end up in the same condition a few years from now (or perhaps even sooner).
Capitalism is surely like magic if you live under these conditions. Just build and build and build. You don't have forecast very accurately. You don't even have to innovate--the innovators (sometimes American technology companies, sometimes Japanese steel companies, etc.) just sell you the technology to do everything, and you put it together, use low cost labor and, in effect, unlimited capital to produce, and off you go. The basic condition that capitalism recognizes that socialism often (but not always) forgets is scarcity of resources. Prices, interest rates--they are just different ways of recognizing scarcity, allocating resources, setting priorities. But these companies don't have to worry about such niceties as scarcity.
Sorry about this digression. I don't have time for more today--must go home. Will try to actually respond tomorrow. In the meantime, if QNTM goes down to the low 20s, I will be buying more. Perhaps will wait for about 2 weeks or so, but for what it is worth at this point, I think it is getting to be almost as cheap as it was last summer. |
