Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Politics : Idea Of The Day -- Ignore unavailable to you. Want to Upgrade?

To: wmwmw who wrote (21654)	11/27/1998 1:39:00 PM
From: wmwmw	Respond to of 50167

When we have a new category of products, like cars, televisions, which were significantly different in nature from the old products we had been using, when they first come to market, they generated huge demands, these demands then spread to other industries, (by income multiple effect,) then the production level of the society kept going up and we have a period of economic prosperity. After many years when these demands were saturated( due to diminishing marginal utilities,) then the demands subsided, the oversupply show up first in the new industry, then spread to other industries and the economy turns towards recession. The causes that controlled economic cycle were demands. The balance between demands and supply has its own law, and is not likely to be affected by human policy. Can the FED's rate cut change the trend in demands? Not likely. If FED didn't cut rate, where should the market be? At most 8000. So if you think rate cut may put economy back upwards, it is wrong. If you think economy will be ok because we are not going to see further drop in demands, I just need proof. But history tell us, if a trend in economy starts, it will go for a while. The weakness in demands of computer industry will spread to other industry, which may im turn affect computer industry, and not easy to stop. We may be still in the big upwards economic cycle, but this cycle consists of many smaller cycles, with ups and downs of themselves. Has the smaller downwards cycle bottomed out? I need something to convince me. The future economy direction depends on the timeliness and extent of the new technology development, which is uncertain to us at present time. We can't build our market on this uncertainty.

To: wmwmw who wrote (21654)	11/28/1998 4:01:00 AM
From: IQBAL LATIF	Respond to of 50167

Points well taken, good post.

To: wmwmw who wrote (21654)	11/28/1998 4:21:00 PM
From: IQBAL LATIF	Read Replies (1) \| Respond to of 50167

Dear Wang-- You wrote- << No body wants to fill all his room with computers, even if they don't cost too much. Therefore , to see if economy will go high, we need to find whether there is higher demand in front of us. I believe in longer term, the US economy still has place to grow, owning to its technology innovation to stimulate demands, but in short term (1 or 2 years) we come to a slowdown because the demand reaches its up limit. Even continuous reduction in computer prices could not raise much demands. Unless some technology breakthrough occur, this slowdown may continue for sometime.>> I thought this may interest you- I was just going thru my routine research and read this on '27th Nov Traders Tribune'-- The Super Bull growth cycle rages on. In the second quarter, we published a special report, that was entitled "The Next Great Growth Wave", which remains ongoing and intact. At that time we basically forecast a technology boom of unprecedented dimensions. Even though this notion was ridiculed by some economist and gloomster types, the fact of the matter is that we are in the midst of a technology boom right here and now which is actually gaining momentum as we speak. With reports just released that a full 50% of US households now own a computer, this is a huge surge from the 30% of just a year or so ago. It is intuitive that in spite of all of the alleged problems in Asia, the real story is sales of US made computers are exploding and now we know why. Signs of economic recovery are evident and its probably going to get better and better. Asian markets have risen between 30 and 50 percent since October and if that continues much more, another boom will be on the way. There are many arguments to support this. While some gloomsters are convinced that we are going to have a recession next year or in the year 2000, I believe the exact opposite may occur. Reason: The pace of innovation is unfolding at such a breathtaking rate, that it is spurring a demand led growth cycle such as we have rarely if ever experienced before. In other words, as the next generation of Intel Pentiums arrive, such as the 500mz or planned 1000mz Pentium IIs, they will be snapped up rapidly by both enthusiasts and businesses seeking the ultimate in must have performance. Then when one factors in bandwidth improvements that are already becoming widely available, it just adds fuel to the fire. Add to this, the fact that so much new buying and upgrading of everything to do with Information Technology had to be put on hold in Asia, Russia and all other nations in trouble, it simply means that the pent up demand for Pentiums and everything else to do with IT, Internet and Intranet technology is actually just increasing exponentially. It is my belief that the closer we get to the new Millennium and after we actually get there, more and more late 20th Century hardware and software will be jettisoned, junked and thrown out on to the garbage heap of history as people focus on the future and the level of new technology they will need to compete andstay ahead. A lot of this is tied into the Year 2000 bug problem. I can honestly foresee much of the effort and expenditure to right this problem being placed in the too hard basket and frustrated CEO's bellowing, just get rid of anything remotely related to this whole Y2K problem and let's start over. There are companies all over the World that are still operating with gear that is over 10 years old and their day of reckoning is coming. It is not inconceivable that there could be an actual shortage of new inventory to satisfy what could become and insatiable demand. Wouldn't the boxmakers and chipmakers like to be in such an enviable position. Judging by the performance of the semi-conductor and software indices of late, something bigger than all of us is going on out there and the Internet is just the icing on the cake being the ultimate and continued driving force behind the whole equation. Wang- now we have two interesting view points and I hope we can reach our own conclusions.. Thanks.