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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: Crimson Ghost who wrote (1789)	11/3/2003 2:35:34 PM
From: russwinter	Respond to of 110194

<Business investment did take a big hit and looks poised for a more sustainable rebound.> Contrary Investor has a chart on page 10 on this issue, contraryinvestor.com that puts this into perspective. Fixed investment as a % of GDP is rarely much above 11-11 1/2%. The chart shows two major investment surges in the last 40 years, the early 80's to 13-14% during the energy boom, and to 13% during the tech bubble. Currently we are at 10 1/2% which is normal, not depressed. At best we are just hiccuping and stabilizing a bit because of the enormous stimulus. But to run out and pay these prices for companies that stand to benefit from investment spending is the height of lunacy. We are not going right back up to 13% tech bubbleland just three years after the last bust. Maybe a little replacement cycle, but that's about all. Meanwhile there's the consumer who makes up the rest of the economy. That's the real story going forward.