To: Ian@SI who wrote (23808 ) 12/19/1999 4:59:00 PM From: Zeev Hed Read Replies (1) | Respond to
Ian, new applications and "killer applications" are not new, and they bring about spurts of growth every few years. The industry, so far, invariably overexpand since each participant is trying to establish itself as "market leader" by reducing costs over increasingly larger sales bases. Unfortunately, they often over expand leading to the cycles we have known in this industry. Right now, as I have stated before, I see no major clouds on the horizons (except a Feb to April May 2000 mini slump), but the impact of sequential tightening by the fed will have a slowdown impact on the economy sooner or later. My reasoning for suggesting that 2001 will be "difficult" is based on a number of factors. One is the overvaluation of the S&P which is going to go to a new extreme sometime in the next 12 months. Another is the tightening. Yet another factor is the fact that 2001 is the first year in a new presidential cycle, any restraint in the economic environment required to cool off what might by then be an overheated economy would be best done in the first year of such a cycle, so that the inccumbant smells like a rose four years later when the economy is back on track from one of its cyclical down turns. These are just few of the reasons, but as you know, this scenario may change in time, since the turnips reserve the right to be wrong, change their mind and change their mind often (G).
