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Microcap & Penny Stocks : Tokyo Joe's Cafe / Societe Anonyme/No Pennies -- Ignore unavailable to you. Want to Upgrade?

To: TokyoMex who wrote (1770)	8/14/1998 12:01:00 AM
From: Rande Is	Read Replies (2) \| Respond to of 119973

OT>> Joe, Thanks for asking. Doing well. Of course whatever rocks are in the road make the relationship stronger and sweetens the voyage. Still working my way back into music biz after 5 year hiatus...After 20 years in biz, the question is "what have you done lately?" Catch 22 . . . C'est le vie I read the details of your European trip. Good to see you living it up. MARKET?? Well, since you asked I will share a scary scenario that keeps popping into mind. Could we be in the midst of a spiral [flush?] toward deflation? Japan over spent and got whiplashed. Instead of Americans learning from Japan's mistakes, we bid Amazon up over 100 bucks on terrible earnings. We think nothing of buying stocks at 150 times earnings. Buy at any cost was the feeling in 29. I think soon the baby boomers are going to realize that mutual funds can go down in price, too. When that kicks in, there will be a rush to sell funds. Already fund managers are selling into whatever rallies occur, thus eliminating real recovery. So demand for stocks dries up, commodities keep dropping, foreign currencies keep falling and American interest rates fall. Very little is known first hand about the effects of deflation. Most of those who experienced it, were kids then. What it essentially does is kill the middle class. The rich and those with great steady income do great. Cheap consumer goods and strong dollar...what a wonderful thing. Downside: Those who get laid off, underemployed, self-employed, unemployed would face the biggest challenges. When prices of goods, fuel and services drop sharply, inventories[supply] are high as demand drops. Why buy today when tomorrow it will certainly be cheaper? 500, 1000, 2000 dollar rebate? Do I hear 3000? 4000? Zero percent interest is becoming standard on autos. Lock in your 5 percent 30 year fixed. No wait . . . Give it a few more months and you could get 4 percent and a new washer/dryer just for re-financing. Problem: Slim margins = corporate downsizing. In other words, LOTS of unemployment. Let me say that again. . . HUGE unemployment. Best hedge against deflation . . . keep your job. The rich will certainly become richer, while poor become poorer and the middle class plays less of a role. Areas to invest in: Expensive travel, dining, entertainment and at the same time low end entertainment [to forget troubles like in the 30's], McDonalds, Taco Bell. Saks Fifth Avenue and yet Family Dollar. I look for mergers to increase sharply as companies caught in the middle scramble for revenues. Banks will certainly merge or fail. When the middle class baby boomers lose confidence in stocks, we will see volume dry up and less money injected into equities. Especially when Asia and others hit a solid bottom, money will flow out of US equities and into foreign funds and currencies. While I am into gloom and doom scenarios, Samsonite got clobbered the other day when it failed to meet expectations. Their reason was that their computer ordering and production systems failed, due to year 2000 problems. They basically lost their new orders and by the time they got themselves back online, over a month's business vanished. I think the big plays for the coming few years in the market involve shorting the Y2K losers. It is simple to find out when a company is no longer delivering on time. If it is traced to Y2K problems, chances are they are going to lose money. Hence price of stock drops. Y2K problems are real and happening. Almost nobody is prepared. Electric companies [dams, power plants], municipalities [water, water treatment, sewage], states [prisons, law enforcement databases], federal, transportation, "just-in-time" manufacturing/supplying companies, the list is limited only by one's imagination. How will this affect markets worldwide? Who knows? But perhaps the very best investment one could make over the next few years is in 5-gallon water jugs, cases of batteries, diesel generators, long shelf-life food supplies, shotguns, fishing and camping equipment and land. Oh, and some bags of US denomination silver coins would be helpful. And heaven forbid there be a run on banks. . . the first one to pull out their money wins . . . everyone else loses. That reminds me. Remember the first of June when Warren Buffet said he was moving out of most stocks and was buying silver. Stocks dropped sharply while silver held its value. Never bet against Buffet. Any survival gear stock companies out there? Gets ya thinkin', huh? Rande Is