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

To: AC Flyer who wrote (20903)	7/8/2002 1:28:49 AM
From: paul_philp	Read Replies (1) \| Respond to of 74559

AC, I have done a lot of studying of bubble over the past year. Here are a few observations. The technologies which 'bubble' - the original investors lose ALL their money and the sector (canal, railway, telegraph, telephone, radio, cars, television, cable TV, satellites, mainframes, PC, Internet) is almost always a long term underpeform for at least a decade. The only time that the crashes from technology bubbles lead to extended depressions were when the government stepped in to restrict trade in some fashion. Watch out for the type of poison John McCain is foisting in the New York Times today. It is the kind of mistake that could cause a depression. Just like the stock market usually predicts recoveries and recessions early. Technology bubble always predict some level of social, economic and political transformation. This is sometimes easy and peaceful and sometimes it is disruptive and violent (TV during the Vietnam war). My last observation, I could go on for days, is that technology bubbles in themselves do not lead to economic booms after the crash. This does happen when there is an already existing economic transformation underway - canals and railways greatly expanded the industrial revolution, radio and TV greatly expanded the mass production revolution, the Internet will create economic wealth gowing forward to the degree that it effectively accelerates the knowledge revolution. Right now there are many social, political and economic roadblock. The path forward is not with technology but with new business practices, governement policies and (especially) more intelligent economic models. IMNSHO. [in edit] Although I am a very slighlt bull on the economy, I am far from bullish on equity markets for the time being. Paul