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Non-Tech : Bill Wexler's Dog Pound -- Ignore unavailable to you. Want to Upgrade?

To: BinkY2K who wrote (8044)	7/5/2001 10:46:27 AM
From: Hank	Read Replies (4) \| Respond to of 10293

Bink, You are probably right about the biotech sector. I fear it will leave many companies dead and buried just like the .com fiasco did. The problem is that many of the larger companies are so big and powerful now that they can literally overtake any smaller competitor within months if they want to. If the smaller company has a lock on patents that prevents them from doing this, then they simply buy them out, take the products, and lay off the people. How can a small biotech that is capitalized at only a couple hundred million dollars compete with somebody like Pfizer who is capitalized at 250 billion? They can't. Plain and simple. Companies like Pfizer, Merck, Novartis etc are out there to play to win and win big and it would truely be a rarity if a smaller biotech managed to retain the rights to the next big block buster drug. I've been to most of these companies and seen first hand what they are capable of. That's why I stay away from the small biotechs that do drug discovery. As for the market, I am not convinced that we are out of the deep end as so many pundits would have you believe. Historically, it takes years for cuts in interest rates to have a lasting effect on the direction of the economy and I see too many pot holes still in the road ahead. Of major concern is the energy crisis. By all accounts I've heard, the rise in natural gas prices that we saw last winter will be even worse next winter and California's electricity problem is predicted to spread to other states, as well. You can't sustain a 0% inflation economy when the very fuel that everyone depends upon is going up 30%, 50%, or 100% in key economic territories like California. I am also not convinced that we've seen the last of a rise in gasoline prices. So far, gas prices have been restrained but all it would take is one minor set back in the oil production food chain to send prices up over $2/gallon. We haven't seen higher gasoline prices reflected in consumer products yet because businesses have been buckling down to control costs. For example, UPS, our nationals biggest package courier, has now expanded their delivery territories for each of their drivers and required that each delivery driver work and extra hour every day so fewer drivers can be used which, in turn, offsets the rising cost of fuel. Other companies have done the same sort of cutting back. However, you can only stretch people just so far. If gas shoots to $2/gallon, companies like UPS will have no choice but to raise their prices and THAT IS inflation! So, I'm with you with respect to cash. My portfolio is still 60% stocks and bonds and 40% cash. Until I see a diminished threat to the stability of our countries energy supply, I am hard pressed to invest in anything right. The NASDAQ went through a terrible bear market but the DOW did not. That also makes me feel uneasy. I would feel more willing to accept the argument that we've seen the bottom if the DOW had fallen below 8000. There are still a lot of over priced stocks in the DOW and I fear we may be in a transition period that will lead us to the "big one" where it will be the DOW's turn to crash next. The NASDAQ and the DOW aren't entirely independent of each other. It just doesn't feel right that one should crash but not the other. We're already seeing a rise in unemployment and that's not a good sign. IF the proverbial shit really hits the fan, then watch out! You'll be able to buy your neighbors house for half of what he paid for it because he'll be out of work and won't be able to make the payments! Sorry to sound so negative but every time I turn on the TV and listen to the BS artists on CNN try to tell me it's all over, I know it's because the boys on Wall St are worried. If it was really over, they wouldn't have to tell us every day that it is so. It would be self evident.