To: Voltaire who wrote (18636 ) 5/13/2000 11:29:00 PM From: SOROS Read Replies (4) | Respond to
I hate to disagree, but I think this market is in serious trouble. It's been pumped way too high the past few years based on new economy thinking. The Internet has, is, and will change everything, but the one thing I see it doing is making it easier for individuals to "go into business" and harder for established companies to make money. It makes profit margins shrink. It makes good employees leave good companies. It makes pirating legitimate industries easier -- like the music industry, the book industry, the movie industry, etc. I finally get what the Internet represents and what it has really accomplished. It epitomizes our society's quest for two things -- constant entertainment and fast, easy money! Smart employees leave well-established jobs for quick and bigger bucks. This helps everyone short-term, but it hurts everyone long-term. No one cares about long-term! Think about the Internet and understand what I just said. The on-line brokers are letting people borrow money to buy stocks. These brokers have "loaned" probably 3-4 times as much money as they have in assets!!! Who have they loaned this money to? The average family who has ZERO savings -- that is, actual money they can withdraw out of an institution without first selling something. This same family has RECORD levels of debt because of this insatiable craving for entertainment and fast, easy money. Why is the US government so intent on getting the Internet in EVERY home? Do they want LESS control of the population? What is this typical family going to do when they have to have money? What is this established company going to do when they are competing with their own former, talented employees for business -- remember, one of them is only concerned with fast, easy money as in stock options (have anyone of them gotten rich in the last few years -- do they care anymore about whether their new company last for years and years anymore? Why are companies willing, or should I say forced, to spend money to get customers on the Internet with tiny profit margins? As more and more "Individuals" become "Companies" on the Internet, where do the customers eventually come from -- looks like too many products, too many distributors, and customer spending that will all of a sudden dwindle? What happens to on-line brokers in a severe market downturn when the typical customer can't be bailed out with "paper profits" from somewhere? No one is thinking anymore. "Paper profits" are NOT the same as money in a bank! They can disappear overnight, and I fear they are about to. This gets much deeper with respect to government control, etc., but I won't go there. Just think about the financial implications of this "new economy" and what's really happening. When the Japanese markets fell, almost ALL of the money was pulled out of mutual funds. Where will Americans get money for the debt they have piled up if they need it? There is ONLY one place they have any money. The entire economy is changing, so one can't just depend on the baby-boomers 401(k)s and inheritances to drive this market for years and years more. They, too, will be forced to re-evaluate their financial pictures as companies go bust in the new economy of slimmer margins, etc. I think Harry Dent missed something in his calculations. He looked at the math equations but ignored the human equations.
