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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: TobagoJack who wrote (2412)	3/16/2001 8:51:17 PM
From: Stock Farmer	Read Replies (2) \| Respond to of 74559

Jay - Caution. By definition, an economist is someone who knows all the answers. To last years questions. John.

To: TobagoJack who wrote (2412)	3/16/2001 8:55:38 PM
From: bambs	Read Replies (1) \| Respond to of 74559

buffet is fantastic....but BRKa will likely be cut in half with everything else...it's up nearly 800% for the decade. 400% will still be an incredible return. It actually could be worse...exposer to banks and insurance companies are his weakness...he likes the banks and insurance companies and i think even here under estimates the extent of loan defaults that will be coming...perhaps he expects as I do that the fed will have to lower rates down to nothing. who knows...its a strange time. i noticed that he dumped out of fannie may and freddie mack...likely just in time. Go Buffet. finance.yahoo.com Bambs

To: TobagoJack who wrote (2412)	3/17/2001 6:25:59 PM
From: David W. Taylor	Read Replies (1) \| Respond to of 74559

Careful with Medroogies, Jay. I have had contact with him before on the CNXT thread, where I was way bearish and he was, of course, bullish. I am now on his ignore list. Probably because I was right and he was wrong. His mind is good and his arguments are usually persuasive but after a while, you begin to realize that his thoughts are less than objective. He NEEDS this bull to come back. By the way, his screen name comes from a fairly frightening character's use of the term to describe his band of thugs in the film Clockwork Orange. Played by Malcolm McDowall, this character was fairly depressive. Interesting choice. Thanks for your pieces lately, Jay. You are currently my favorite SI character.

To: TobagoJack who wrote (2412)	3/23/2001 3:52:31 PM
From: MeDroogies	Read Replies (1) \| Respond to of 74559

I am lost about what you call as my defense of the New Econ. I never was a proponent of the New Econ. I think the New Econ is a crock. That said, there is a different financial dynamic at work with tech stocks. The dynamic is this: Whereas traditional manufacturing has a point of diminishing returns based on the capital applied to production, the same is not true with software. In other words, software is almost all "sunk cost" as soon as it is complete, so all moneys made after the sunk costs are covered are nothing but pure gains. There is no maintenance applied to the product. Basically, you can continue to ship as much software as people are willing to buy with your only cost being shipping and sales commission. That's where the concept of "increasing returns" fooled so many into thinking there was nothing but gains ahead.......... Here is where they disconnected - while increasing returns DO accrue to the product (whatever it is), you can't afford to let the product sit on the shelf unchanged. Otherwise, you become outdated and overrun. You must constantly upgrade and improve. As a result, the "costs" that usually incur diminishing returns on manufacturing are switched to the reseach and development side, where product version x.1 is about to be launched and will have an "increasing returns" scale all to itself. Product x.0 will eventually die off (and likely be bought by Computer Associates...LOL) and stop earning any returns as x.1 increases. But you can't stop here....x.2 must be in the works, as well as x.3 and so on...... That's where I had my disagreement with the New Econ folk. I knew that while traditional diminishing returns didn't apply, there was still a cost of doing business that resided on the initial costs side. I knew the business cycle was still alive and well, unlike so many others who felt that it was gone. That said, as much as I didn't hold with them, I don't hold with the other crew who believe that some sort of financial collapse is imminent. Much as you are willing to adhere to your position until...November, is it?...I will adhere to mine until there is rock hard evidence that my belief is incorrect. At this point, there is little. The ONLY evidence is the savings rate, which is unbearably low. Other than that, all other indicators remain healthy. And no, stock indexes are not leading indicators...they are lagging indicators.