To: JDN who wrote (39464 ) 8/13/2000 9:39:38 AM From: bambs Read Replies (1) | Respond to I think in the case of csco's customers, there will be a trick up effect. I think that the growth rate will slow for csco as companies slow there Internet related projects do to the high costs, extreme competition and poor profit margins. I think that the current change in interest rates are not a that big a factor in the long run. I think the biggest factor leading to a change in business spending habits will be the end of this bull market. Companies everywhere have been padding earnings with mark to market gains from investments. Companies 30-50% in companies like DELL, INTC, CSCO, IBM etc. I think when the gains from investments disappear from the balance sheet it will be noticed. If those gains from investments turn into losses from investments the net income will be crushed for most high tech firms. I think this market is a house of cards. These companies all investing in each other and relying on their stocks to go up to increase earnings. It will spin down and have a over powering effect on the market and the publics bullish attitude. Now, getting to the public...I think the public has been partying hard during this bull market. 0% average real savings rate. Record debt levels, corporate, government, and personal. I think that there is a big chunk of the population that owns all sorts of index funds, growth funds, tech funds and "core holdings" like csco. I think that they are counting on above average performance in these funds and stocks for their retirement. I saw a study one of the online stock companies that said the average investor expected a year over year gain of nearly 22% in the market over the next decade. The investors with 10-15 years experience expected 18%. I think this expectation has caused the explosion in the economy of the past years. Dot.com and high tech millionaires running around spending like crazy and the public following suit. I think that the market will float down for a couple of years before it done. Then it will be dead money for a few years more. It will be a stock pickers market. Value in big caps will be bought, growth only in small caps with profit. As people wake up and start to realize that they are not rich, that retiring comfortably will be difficult, they will change there spending habits. As consumers change their spending habits it will start a spin down cycle in the economy and the market. Some retailers first and tech will be hit first. Then thier will be now where to hide. Dow and S&P will be cooked on the back of GE. GE stock price should be peaking now. I think it's due to start a trend down. 1 or 2 quarters left. GE makes up almost 7% of the dow.
