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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Wyätt Gwyön who wrote (16435)	2/15/2003 9:24:43 PM
From: jeffbas	Read Replies (2) \| Respond to of 78671

I guess a leading example wasn't enough to make the point for you. You want DELL, IBM, LLTC, the drug industry, and all service industries? The economy today is driven by less capital intensive companies than it was forty years ago, and more service oriented ones (which require less than average capital). Eighty years ago very capital intensive railroads and utilities were hot stocks. "Capital intensive" means lots of debt, increased risk, lower profit margins, and lower valuations. Market Cap to GDP SHOULD be higher now than in the past. In my opinion, the only question worth discussing is how much higher would be consistent with the past, when adjusted for the different mix of the economy.