You may be right about RCA - I really have never looked at a long term chart. At least they stayed in business, and I guess I've always assumed that they eventually got higher than the peak in the 20's, though I've never looked. I know that the utility stocks did, although it took them 30-40 years to do so.
Allow me to add that I do have shares in a number of internuts, almost all of which I got in IPOs, and almost all very small positions. My plan is to sell them after 30 days, though I'm tempted to sell only 99 shares of each and ask for the certificate on the other share. Did you know that the worthless shares of bankrupt companies can be very decorative? <VBG>
One place I disagree with you is where you say that the internet will become increasingly competitive. If you look at these IPO's it is obvious that these companies are looking for growth regardless of profits - virtually none are making money, and most are losing money very, very fast. As reason sets in and investors start looking for profits, instead of just growth, these companies will have to raise prices and cut back costs in an attempt to be profitable. At this point many will crash and burn, but after that there will be less competition, not more. For e-tailers I don't think the competition from virtual warehouses or importers will lessen, but for hardware and software I believe it will.
I think that when the internuts begin to implode it will be a chain reaction. First the stocks will begin to drop. About the same time the market for IPOs will dry up. This will mean sure death for them because without access to an unlimited supply of money, they have to focus on profitability. When they focus on profitability, much of the growth will stop. With spending constrained some high tech flyers like CSCO may also get cut down as growth stops. And as you point out, some people will lose a lot of money, which will affect spending, and which will drive us into a recession or worse.
To me one key is the IPOs. So long as these keep flying, the internut market is alive. Without a supply of fresh money, it is dead.
Carl |
