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

To: TobagoJack who wrote (70812)	12/6/2008 1:18:32 AM
From: Maurice Winn	3 Recommendations Read Replies (1) \| Respond to of 74559

TJ, $15 is doable for QCOM. Not likely, but quite possible. Similarly, $400 is quite possible for gold but not likely. If politicians really go flat out to save the world, they could make them worth less than that too. But we are now heading for 3 years into the decline and a full 18 months into the post Northern Rock earthquakes and over a year into the outright collapse mode in financial companies dependent on mortgages, credit default swaps and other swindles. Another year will give an idea of how low we can go in limbo mode. It's important for everyone to remember that things are never so bad that they can't get worse. Many people are inclined to think "this must be the bottom" just because such lows are not in recent experience. But that's not how nature works. Nature is quite happy to have dinosaurs go extinct other than crocodiles, tuataras and a few similar creatures. There's no law of nature which says 6 billion people living the life of Riley is a natural entitlement. The lesson of early 20th century financial panics, WWI, 1929 to 1930s depression, WWII is that things can go from bad to worse, to really bad and even to the extent of nuclear war [when the things had barely been invented]. Now we are armed to the teeth with umpty megatons of fusion reactions with GPS co-ordinates as guides. Economies are not based on agricultural subsistence as 90% of humanity lived 100 years ago. Now it's 80% urban based on globalized post industrial mutually dependent trade with relatively few farmers propping up cities of megamillions with no visible means of support. Population of Hong Kong in 1908 was ... Google says... hang on, 330,000 populstat.info but is now 7 million, give or take a few. Mostly they do not grow rice in their multi-storey apartments. That is potential for some interesting tests of economic and political stability in a downturn. Similar ratios apply to OPEC countries such as Saudi Arabia where a century ago, camels were more common than cars. I remain undecided as to whether the current financial catastrophe will cascade into implosion and Argentinian processes with Zimbabwean outcome, or will continue into a globalized Japanese style 2 decade slide into 90% property devaluation and economic dislocation, or maybe even level out and climb out after a bumpy bottom into a wonderful new realm like the post Y2K crunch. Japan was small compared with the rest of the world so they were able to export their way out of serious trouble. The Asian Contagion was large, but localized, with huge economic externalities to lean on. Y2K was a relatively minor glitch in a much bigger economic picture. This is seriously serious with families turfed out of houses and jobs. People who were barely aware that there was a Y2K glitch are learning up close and personal about biblical proverbs. There's plenty of scope for everyone to make things much, much worse. Whether they'll choose to do so remains open. At present I'm sticking with a bumpy bottom over the next two years with many mergers, bankruptcies, unemployment, pay cuts, rather than a world of pitch forks, bombs and mass unemployment [of 30% levels]. So far, the recession is good from my point of view. Petrol is cheaper, cafes have seats available, traffic jams are reduced, NZ$ is down, people are buying cyberphones flat out to stay connected [instead of goofing around with overseas holidays, new cars, fancy meals, second houses etc]. I bet I can book flights any time I like now at cheaper prices than this time a year ago. In NZ$, [grocery and lifestyle pricing] my NAV is down not much from the beginning of the year. finance.yahoo.com As QCOM declined 25%, NZ$ declined [and I hope you took up my offer to profit from my warnings] from US83c to US53c. Adjusted for housing and bits and pieces, I might even be up. [Zenbu's value is way up on this time last year, but that's not counted as it's total guesswork on what will happen over 10 years and there's no "market value" as it's privately owned]. How much is your NAV up from January 2008? 30%? 20%? Or is it a slight negative like -10% or even -20%? Expecting $200 a barrel and getting $40 can't be good. Expecting $2000 an ounce from $1000 and getting $750 isn't an increase. Platinum down from $2100 to $800 isn't an increase. Property prices in Hong Kong haven't boomed [if marked to market rather than valued on revenue stream]. Mqurice