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

To: Ilaine who wrote (27893)	1/26/2003 5:14:40 PM
From: Maurice Winn	Read Replies (1) \| Respond to of 74559

Quite right CB. <I think maybe you're confusing booms with bubbles?> China is not in a bubble. Well, it might be now, because I don't know enough about what's going on there. But it has been in a long term boom depending on the definition of boom and bubble. Underpinning each bubble is a boom. When the boom morphs into a bubble is the hard part to determine. I think that's the point of Uncle Al's comments that it's only in hindsight that one can know whether it's a boom or a bubble. It's likely that each boom morphs into a bubble because the dividing line is so indistinct and the latecomers figure that it is still boom times whereas the reality has already passed. But being late isn't necessarily bad. Booms continue for the successful. For example, Google was late to the cyberspace frenzy [though of course the beginnings were mid 1990s]. Google is to me one of the most amazing things I have ever seen, although, reduced to its elements, it's a prosaic set of ideas, combined, like a bunch of boring mitochondria, neurons and haemoglobin, none of which are unique to humans, into something quite remarkable. I suppose at some time, China will have a bust. Perhaps precipitated by the USA failing to hold the pace by meeting Jay's apocalyptic prognostications. Picking the time will be the hard part. Meanwhile, you have to be in to win. As in 1991, when Ravi Bhatra was predicting doom, it might really be the time to get serious about investing in China right now. Or the USA. As Uncle Al says, it'll only be in hindsight that we'll know whether it's a bubble. But busts do follow booms and bubbles and how to distinguish the two is the hard part. If a bubble doesn't have a separate identity from a boom, and is only defined by the fact that a bust happens, then perhaps a boom is a bubble. Turning to a bubble only in the past tense. Mqurice