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

To: TobagoJack who wrote (11611)	12/3/2001 3:29:46 PM
From: MeDroogies	Respond to of 74559

Markets, by and large, try to be anticipatory. In fact, what they are depends on the stage at which you are analyzing. Bear markets tend to be pretty much anticipatory at the start, and reactionary at the end. That is because the last people out are panicked. That is also why so many "crashes" resulted in not a whit of a problem, from an investing standpoint. The reactionary forces were kicking in too early, and people who had a better viewpoint held the day (not using day in the literal sense...since so many people tend to be literal these days). By the same token, bull markets are anticipatory at the beginning and reactionary at the end. So, by the time I even began commenting on what was going on, it was pretty clear to me that the second half of the bear was beginning. As for the "bigger the pop, the bigger the mess", that's true, to some extent. Depends on how the pop occurs (don't know J6P/W3C or what it means). I've seen things pop and leave little mess (from a purely physical standpoint). Then again, I've visited the WTC clean up site several times and seen a considerable mess (though even there, most structural engineers I've met are surprised at the LACK of collateral damage...the WTC was SO well built). Even so, as long as the person doing the clean up is aware of what needs to be done, and how to do it...the clean up is what matters. A large mess doesn't necessarily mean a long, drawn out, or difficult clean up. They CAN be, but it depends on how it's handled. As an example, I will point out the cleanup of Post-Gulf War Kuwait. The oil well fires that were set were supposed to take this incredible amount of time to clean up. However, as in everything we do, as we start a job we learn better ways to do it. In the end, the last oil well fire was put out months ahead of the estimated time. Take that a step further to economics. Knowing what we know now of past problems and issues, it is possible to handle credit and liquidity crunches in a more effective manner. By all rights, the savings and loan debacle and the Latin American Loan crisis should have crippled the US banking system. It didn't. As for how the clean up itself is taking place, you've oversimplified my viewpoint...just like you have virtually everything else I've written. So, I'll leave it at that.

To: TobagoJack who wrote (11611)	12/3/2001 4:00:46 PM
From: MeDroogies	Respond to of 74559

BTW, as a response to your question about ad budgets...they are down slightly. In the industry press, they play out how bad it is, but I take it in stride because I've seen worse years. I've seen it worse for as long as 36 months. We aren't even close to that. In fact, as bad as things HAD gotten, they really ONLY got bad after 9/11. There had literally been no budgets since then. But in the last 2 weeks, that has changed. In effect, what has been bad in advertising are 2 things. 1. overextended expectations. Many management leaders (Mel Karmazin, for example) really believed they could squeeze ridiculous increases out of advertisers when realists like me knew that the market had stabilized. People who work at lower tier outlets in mass media have done well, because their prices were already low and optimization programs at the ad agencies have benefitted them. Larger companies have suffered because they got greedy and cut their own throats. 2. Too many eyeballs. Advertising buys based on what is available. From 1997-2000, the number of "eyeballs" as measured by impression levels grew by an exponential amount, due to the internet. This has driven down prices (it doesn't take a genius to figure out why). Smaller magazines have gotten killed because they started up in a marketplace they thought was growing at X rate, at a point in time when every dotcom and his brother were wasting their IPO money. That went away (as we all knew it would), and they didn't plan on it. Tough luck for them. In effect, the loss of any ad dollars really hasn't been much, relatively, on a percentage basis. The problem has been lousy management at a number of places where they used the ad model to justify their existence. Advertising requires professionals, and from 1997 til now, the ad market has sucked up a number of amateurs (and is now spitting them out).