>>Perhaps Compaq's next acquisition should have some geographic considerations attached to it. A true multinational company enjoys many benefits.
NW<<
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Exactly my point, Companies are now, based on the free markets available and trade agreements, capable of "spreading risks" and improving productivity throughout the entire globe.
In my opinion, the US is the best market in the world due to its stability, currency strength, and size.
Why has it become so?
Free markets, and lately, responsible fiscal policies (while this last point is arguable, depending how politicians "massage" numbers, it is still better than in many countries), many foreign investors still consider the US the most stable currency, indeed countries use it as a reserve currency, gold, to the chagrin of many "bugs" is fast becoming "the currency reserve of the barbarians".
"Store of value" will be based on the productivity and efficiencies, of each economy, or "block" of economies, not on a metal that is becoming easier to extract, and its perception of value is fast diminishing. (I am sure I will earn many flames for this statement).
Now, The European Block (11 countries, backing the Euro), have a chance to compete with the US, only if they act as a unified market, only under such market can it be compared to that of the US.
The big question will be, if the European politician, will have the willpower to execute specific policies needed to find the efficiencies required to function as a true free market.
Inherently, the Europeans have a Bureaucratic mentality, as opposed to the entrepreneur mentality of the US businessman. Many of the European countries are going to have to get rid of the excessive social programs, if they are to succeed in competing globally.
Here is where the risk element comes in, If Compaq begins to expand by its own or via acquisitions, and the Europeans do not succeed in integrating their economies, then the European exposure to such environment will be a negative one for Compaq (or any other company for that matter).
The current trend seems to indicate that the Europeans will adjust to the policies of the free market.
Take for example the Mercedes Benz factory in the US, manufacturing their new utility vehicle, this is a non union factory, I do not see workers complaining much. Corporations, will seek efficiencies which leads to profitability, this is easier to achieve under an environment of free market.
In addition, there will be other areas in which similar alliances could/will be formed, look for an extended Nafta, perhaps even an integration with Mercosur, in South America. Now think about a market that size....
The future availability of information to the masses, will educate the same, and this information will make the consumer market more knowledgeable and demanding for better products, better environmental policies, and better education to be skilled and obtain the necessary training in the jobs that will be available. Not necessarily the type of jobs that were available in the past. (Look at the current unemployment rate 4.3%, and inflation of approximately 2% or less).
Take for example the Internet and this SI forum, 5 years ago, the independent investor could not have a chance of seeking, finding and sharing information that it is now available here, soon, I would not be surprised that information about stocks in other countries/markets, will become readily available, including all other implications that come under such environment of diversification.
The large labor pool of unskilled workers in places like Asia, Latin America, and even Africa, will keep the cost of unskilled labor low, allowing corporations a long period of future low interest rates and an environment of low inflation.
All of the above is already taking place. Trade agreements, while bringing some pain to specific jobs and/or areas, the overall results are positive, (otherwise a 4.3 % unemployment rate could not be possible, under a scenario were "the sucking sound of jobs going to Mexico", were taking place).
Compaq, as a global company could better spread the risks of doing business around the globe.
Finally let's not forget that Compaq is in the business of facilitating the dissemination of information, globally.
My opinion only. |
