Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Gorilla and King Portfolio Candidates -- Ignore unavailable to you. Want to Upgrade?

To: techreports who wrote (49358)	12/6/2001 11:57:38 AM
From: Seeker of Truth	Read Replies (1) \| Respond to of 54805

"NOT MUCH BEING DONE TO HELP THE CONSUMER." No doubt you have seen the recent information that 70% of the credit cards out there are not fully paid off at the end of each month. That's in the U.S. It sounds pretty bad to me. Maybe I'm naive. A banker once tried to make me understand that in principle these days cars, big appliances, even houses are essentially rented to those who borrow even though on paper the ownership belongs to the buyer. That means that 70% of the population are renters and 30% are lenders. The 30% get richer and richer in comparison to the 70%. The 70% number sounds scary but maybe the situation is stable. If Mr. X goes bankrupt his house is sold by the bank to Mr. Y. Mr. X moves into a shabby apartment somewhere. If Mr. Y is also a borrower like X, then in turn he will hand over the house to Z, when he can no longer meet the payments. Will technology enable people to live within their means? The reason why this topic is not off topic is because if the economy is basically sick then we want to avoid stocks, in general but if the economy is basically stable then by all means invest when the price is right and the purchased object is a gorilla.

To: techreports who wrote (49358)	12/7/2001 3:52:48 AM
From: chaz	Read Replies (4) \| Respond to of 54805

Techreports: Am I missing something? If interest rates are low, is that not an incentive to take on debt? Many may do so...ala Ford Credit lending to less and less qualified borrowers. I agree added debt is dangerous in the present situation. If you can't get a raise, then debt isn't easily erased by increased future income. If inflation remains low, increased wage rates are unlikely. However, this recession is not due to a decrease in consumer spending (debt or otherwise), but to a lack of business profit due to a lack of business spending. As profits return, won't that reduce the S&P P/E sufficiently to keep stocks attractive? Compared to the interest on cash savings, isn't business investment a better return on capital than anything else? Comments anyone? Chaz