Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Gold/Mining/Energy : TS TELECOM (www.tstelecom.com): ASPIRING TELECO -- Ignore unavailable to you. Want to Upgrade?

To: speculatingvalue who wrote (1467)	3/5/2000 8:54:00 PM
From: speculatingvalue	Read Replies (1) \| Respond to of 1762

As for the bear market: Most crashes occur when the size of the money supply is reduced suddenly like in 1929. - if an economy is growing, it needs more money - if it is shrinking, it needs less. There are three main ways money is "created" 1. borrowing: when you borrow, you create money because the bank only has to have 5% real cash for every 100% cheque they crack 2. the stock market: $100,000 in buying can increase a company's market cap by $50 million if the price goes up 3. government: before income tax was invented, the government used to print money rather than borrow it. So the question is: A) Is the market growing or shrinking? B) How is money being created? A) Governments in Canada are removing "friction" by reducing capital gains taxes and new competion in securities is reducing commissions. We are in the midst of a technological change akin to the invention of electricity. The internet is profoundly affecting the world and lowering costs of almost every business. The internet is not the world wide web. WWW sits on top of the TCP/IP internet infrastructure responsible for the current market revolution. TCP/IP is a global standards based way of trading information, whether it be text, audio or video. As the founder and CEO of an internet company, I see first hand how much money we are saving our partners and how much we are improving their productivity. Of course some internet companies are grossly over valued (Amazon.com...), but that doesn't mean the economy isn't growing at exponential rates. So, I would argue the economy is growing. Real wealth occurs when more people are working producing more goods and services. Unemployment rates argue that the economy is growing. B) How is this wealth being created: - governments love to borrow and hate to print - as governments pay off their deficits, the demand for money is shrinking. The long term pressure on interest rates is downwards. Instead of buying T-bills, banks will have to start lending money to small business. The economy is tending to the most efficient money creation mechanism which is the stock market. I think avoiding exposure to the bull market will cause you to miss opportunities. In my mind: - grossly overvalued companies (AOL) will buy real world companies (Time Warner) and the valuations will become reasonable - money will flow from hyped startups (bingo.com) to real companies (TS Telecom) The main thing that would cause a market crash now is a rapid rise in interest rates, but given that this is an election year, I don't see it likely. Actually, the internet bull market has created unbelievable opportunities in traditional companies. TOM is one. My other favorite is CUQ-TSE where they have $2.00 / share in cash. You can buy $2 bills for $1.60 and get .25 earnings at $20 / share in revenues for free. I predict Y2K will be the biggest bull year of the century. The difference between now and 1929 is that they didn't talk about a crash in 1929... Markets don't go on forever, but the crashes aren't cyclical. Typically, the crash represents government mismanagement. I expect it will be caused by some new tax or interest rate increase which likely is not imminent.

To: speculatingvalue who wrote (1467)	3/5/2000 9:49:00 PM
From: John Trudeau	Read Replies (1) \| Respond to of 1762

Steve, I too am impressed with TOMmy's margins. The 6% gift, not a big deal to me. I've seen many Co's commit far greater sins. About the 1929 crash, I thought the big problem was leverage. Leverage in our market is higher than it's ever been. It's a house of cards waiting to collapse. The only saviour, might be this market deserves to be where it is. I disagree, but not entirely. Real wealth will be created through the efficiencies of the internet (e.g. business to business e-commerce), but honestly, I don't see consumers buying more than they did before... just differently. I still like TOMmy, but it was a lot easier to like at .60/share. In this wacky market, we might see them go to $10/share, so tucking away a bit is a good idea. One's prime directive has to be "preservation of capital". Deciding on where in the cycle we are, or where we're headed, will determine our worthiness in making and keeping our profits. Best of luck, JT