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Pastimes : The Justa & Lars Honors Bob Brinker Investment Club -- Ignore unavailable to you. Want to Upgrade?

To: Hank Stamper who wrote (5609)	6/4/1999 7:17:00 PM
From: Carl R.	Read Replies (1) \| Respond to of 15132

David, you are exactly right. Major technological changes are nearly always followed the same way. First comes greed. Then comes the crash, and then depression. Look at railroads or electrical generation last century. Electric power generation. Steam engines. Cars. Radios. Look at the depression of the early 1890's, or the 1930's. The only exception I can think of is the computer age, which was followed by a series of recessions in the 70's than a depression. Time and time again, history repeats itself. There is no reason to believe that it won't do so again. The only question is what the trigger will be to set off the inevitable chain of events. Once it starts, the progression will be predictable, however. The bottomless well of IPO dollars will dry up. Startups will become more frugal. Companies already in business will focus on profit instead of growth. Companies that sell hardware and software to these companies will see their growth rates decline, and some will see sales decline even though internet usage will continue to grow. Eventually marginal players will get driven out of the market, but others will continue to grow. Where are all the railroads of the last century? Where are all the radio and car companies of the 20's? ( Think of all the computer companies like Data General, Wang, DEC, Honeywell, Sperry, IPL, Control Data etc. Or the Micro computer companies like Eagle, Smoke Signal Broadcasting, and so on...) As investors in marginal companies lose money, they will reduce spending, and even non-internet companies will show declines. Baby boomers getting approaching 60's will decide to get more conservative, and move money out of the market, triggering a general bear market, and the circle repeats. As earnings decline, the stocks chase PE's down, and lo and behold we have a major bear market. Investors pull their money out and vow never to return. Eventually the market becomes undervalued enough that it begins to rise. It eventually hits new highs, but it may well take 10 years. Could it happen? Yes. Will it happen? Time will tell. What will be the trigger? I have no idea. When will it happen? I have absolutely no idea, but my guess is sometime in the next 5 years. There are still some companies out there with reasonable valuations if you look hard enough. I just hope I'm doing a good job of finding them. Carl