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Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: KyrosL who wrote (40193)	2/13/2000 5:02:00 PM
From: Michael Watkins	Respond to of 99985

A fine post, and deserving of more than my toungue in cheek answer (only I don't have one and wonder the same things as you). PS. And please, don't tell me that China and India are gonna save us. All together now, "they are going to make it up in volume". ;)

To: KyrosL who wrote (40193)	2/13/2000 5:19:00 PM
From: RocketMan	Read Replies (1) \| Respond to of 99985

I have a hard time figuring out where all the new economy profits are going to come from, once the new economy infrastructure nears completion. I am reminded of a cartoon from a very old Playboy, circa 1962, when the subject was much more topical. Two golfers on a course, one ready to putt, while a BFMC (euphemism for a nuclear explosion) goes off in the distance. One golfer to the other: go ahead and putt, we still have some time before the overpressure shock gets to us. Even though we think in terms of PCs, e-commerce, and so forth, I don't think we have a clue where the real profits are going to come from a decade or more from now. We will be surprised at the new markets that have been been opened by instantaneous mbps wireless, by throw-away gigabyte storage, or by the freedom afforded by telecommuting. So go ahead and putt. Oh, the centerfold wasn't bad either :-)

To: KyrosL who wrote (40193)	2/13/2000 5:39:00 PM
From: Zeev Hed	Respond to of 99985

Kyros, a good point, but, when the US GDP keeps growing at 5%/year and when output per hour worked keep growing at a similar rate, the technology sector, in general, can grow at a much higher rate. Selected segments, particularly those deploying new telecommunication technology, in some cases, where none exists, could also, for a time, grow at an excessive rate. Having said all that, I also think that the current pricing of some of these equities (including MSFT and CSCO) discount a growth rate well in excess of 30% in their businesses, and I do not see that kind of a growth any time soon. Thus my thesis that sooner or later, we will get into a large range bound market (maybe from about 6500 to 13,000 on the DOW) for quite a long period, until the earnings creep back up to make equities more competitive with other investment like, for instance, fixed income investments. I also think that we are going to have a shift from investing to divesting as more of the baby boomers, now in their early fifties start and draw on their retirement funds instead of investing there. This trend will probably not begin for another five to ten years, but will, IMHO, accentuate major declines in the markets during the next 10 to 15 years of the range bound market. Of course the market could continue in its recent parabolic rise (due to the vast amounts of liquidity out there), but I hope it does not, because that will surely lead to a catastrophic type decline, which I am not sure anyone really wants. Zeev

To: KyrosL who wrote (40193)	2/13/2000 8:50:00 PM
From: Lee Lichterman III	Read Replies (2) \| Respond to of 99985

I will take a stab at your new economy question and I will even take the rare bull argument. >>I certainly can't see giving anything close to 30% of my income to these tech companies << You will do so without realizing it. If JINI ever becomes mainstream, everything in your house, your car and your sellphone/PDA will be integrated and you won't be able to live without it. They are making addicts out of us slowly and we won't be able to go back to the way we were after a few more years. You mentioned you cancelled your subcriptions because the information was free and quicker now. Let them keep you hooked for another few years then cut off the supply of free information. What would you do if you couldn't get financial news free anymore, even simple quotes, imagine free edgar charging for financial data, 10Qs, 10Ks etc. SI already charges the new members monthly lest we forget us early guys are getting a benefit. Your house will be fully automated and you will most likely pay a monthly fee to keep it in the loop to the required services we will come to depend on. Cars will be remotely controlled and we will pay a fee for that. Yes eventually once the infra structure is complete, the fees will drop but by then, they will have scalped you blind. Just think abot TV which we take for granted.. Yes we can watch 5 channels for free without cable but how many do so. Remember when cable was 9 bucks a month, what do you pay now??? Digital TV is coming and coming fast and they may not keep the old signals out there much longer after the switch takes place. That will mean that EVERYONE will have to go buy a new TV or two, or three etc. Have you priced those boogers yet??? Ouch!!! I was doing some work on my digital camera pictures and realized that despite my original views, I may actually need a faster computer with more bells and whistles soon since copying and pasting large JPEG files is slow on my 350 with 128 RAM. How fast a computer and how big a hard drive will you need when tape video goes out and digital video becomes the standard. I hear you need a 40 Gig hard drive just to edit one movie. As I was typing this I looked up and saw a video game commercial on TV. Heck I remember an expensive video game was 10-15 bucks a few years ago. Now they are 60 to 100 bucks but who wants to play an old 8 or 16 bit game anymore, the kids want the best new stuff. Your car already has more processors in it than most super computers did 20 years ago. Your brakes, engine, accessories etc are all controlled now by chips. Cell phones are morphing into mini computers now. Soon you will be monitoring your stocks, talking to your broker, controlling your house, car etc all from your cell phone. Of course all this air time you will pay for. Now on the bearish side... As I said, who will control all this and who will be the leaders? That is why I think this market is nuts. Heck I use AT&T for my internet and web host yet their stock trades at historically sane valuations. They are into cable, wireless etc. On the other hand, AOL was one sided and traded at ridiculous valuations and some of the other companies they compete with are worse. Who says AOL won't just go away? Who says that MSFT or SUNW will dominate the future. Heck a company may come up with a new generation router that CSCO won't have rights to. Technology changes too fast now so it is all just one big gamble but people aren't betting small anymore. The new economy is real but the future winners aren't as clear cut as the PE multiples show. Good Luck, Lee