Is the "New Economy" coming back?
 

You thought we left all that "new economy" hoopla behind....

Well, "Wired" magazine is arguing that the "new economy" is coming back.... The "recession" we're in is a shallow one, and we're back on the way to prosperity.

Is this for real, or just wishful thinking?

I personally do believe it - I think the economy would have probably come back by earlier this year if it hadn't been set back by 9/11.... But I think things are coming back on track. I fully expect we have a few more years of growth ahead of us....

I don't expect we'll see the ridiculously high valuations which we saw before - people will be a bit more sensible. But I do think there will be growth....

As you may know, I tend to follow the views of Harry S. Dent on this, though the Wired article is interesting too.... Read it below.

- Dien Rice


Wired Magazine - on the New Economy's predicted return....

SOCIONOMICS and herding is the answer to your question.
 

Hi Dien

I'm always happy to talk about the economy ,thanks for bring it up.

>You thought we left all that "new economy" hoopla behind.... Well,
>"Wired" magazine is arguing that the "new economy" is coming
>back.... The "recession" we're in is a shallow one, and we're back on
>the way to prosperity.

>Is this for real, or just wishful thinking?

Wishful thinking I'm sure.

>I personally do believe it - I think the economy would have probably
>come back by earlier this year if it hadn't been set back by 9/11.... But
>I think things are coming back on track. I fully expect we have a few
>more years of growth ahead of us....

9/11 was just a small blip in the DJIA (economy). Just like when you
throw a stone in the water, you get a small blip, then the ripples and
the water goes back to normal.

We are NOW in a double dip recession which will end up a depression.
But the gov will not tell you that for at leased 6 to 8 more months that
we are in a double dip recession.

I rely on my information by studying the Kondratieff Wave and the
DJIA Wave over the last 100-150 years. They are just about a mirror
image of each other. You will see the 30 and 70 year cycles jump out
at you. Couple this with The Elliott Wave that explains the above two
waves and you can see where we are headed.

Two books that will explain in detail what's ahead by author Robert R
Prechter Jr .

Book one:
"The Wave Principle of Human Social Behavior and the New Science
of SOCIONOMICS" The purpose of this book is to establish the idea
that in humans, an unconscious HERDING impulse impels social mood
trends and changes that are specifically pattern according to a natural
growth principle and which in turn is the engine of cultural expression
and social action. He goes on to explain the herding that takes place
in the stock market. This is a book everyone should have, buy it or
pick it up at your local library.

Book two:
"Conquer the Crash, you can Survive and Prosper in a Deflationary Depression"
This book is what is happing right now. This is the other book you should have
in your home library.

Here is part of a post I put up on another forum.

We will be at war with Iraq within the next 30 days.
The shooting war will last a few days less then 30 days,
but the occupation will last forever.

Oil prices will spike, but we will let Iraq pump 2 to 3 times as much
oil as they are now pumping. The oil prices should then return to $29
- $33 a barrel.

As for Saddam Hussein if we capture him alive, what do we do with him ????

No one has ever told us how we are going to pay for the many wars
we are getting into.

Any ideas ?

Regards,

D.R.(Don)McArdle
Stock Market Trends - Forum
http://www.network54.com/Hide/Forum/213585

Do you agree with Boris...?
 

Hi,

Do you agree with Boris's assertion in message #32 in the list of messages linked to below? Message #32 is addressed to "Eric in the Ozarks" and is signed "Boris."

Best,

- Boyd


Scroll for message 32

Yes, the New Economy has a lot of growth ahead!
 

I believe the new economy is coming back. Intel's last annual report has some insightful comments on technology, which I will quote here:

---[From Intel Annual Report 2001, page 3]---

As we end this rocky year, we are heartened by taking a historical view. Historians tell us that over the last two centuries, major technological revolutions have ridden waves of boom and bust, only to rebound with periods of sustained build-out. This pattern has played out in the steel and rail industries as well as others. If history is any guide, the Internet revolution is on track for decades of growth and has yet to see its most rewarding years.

1. birth. At the beginning of a major technological era, enabling technologies emerge and are eagerly welcomed as revolutionary. Excitement builds as technological pioneers crowd into the field and innovations flourish. In some cases, early investors make extraordinary profits, fueling speculation, chaos and investment mania, even irrational exuberance.

2. turbulence. Overinvestment and overcapacity burst the bubble of the new technology’s progress. Sometimes linked to a slowing economy, stock prices drop and even crash. Some investors lose everything; some companies fold. Investment halts as financiers retrench. Observers may declare the technology dead. But the story is by no means over.

3. build-out. Confidence returns. Real value emerges. Missing components of the technology are put in place, leading to full implementation. The technology penetrates the economy as other industries organize around it and businesses adjust to take full advantage of it. Sustained investment yields robust returns. The technology becomes the driving engine of the economy.

---[End Quote]---

And an example from the rail revolution...

---[From Intel Annual Report 2001, page 4]---

The rail revolution

1. birth. In 1828, construction began on the first U.S. steam rail line, the Baltimore & Ohio. American innovations more powerful locomotives and cost-effective wooden rails soon fueled a boom. States invested heavily in rail infrastructure, and business leaders lobbied for railway links between key cities.

2. turbulence. Railroad speculation contributed to the depression of 1859, with many investors losing large sums. Rampant cost overruns and nationwide mania over the building of the transcontinental railroad, completed in 1869, left major rail financier Jay Cooke & Co. bankrupt by 1873.

3. build-out. Extended rail construction in the 1870s and 1880s facilitated the nation’s industrialization and the growth of the West. Hardier steel rails replaced wood, locomotives improved, and a standard-gauge width was adopted, allowing nationwide uniformity of tracks and cars. By 1900, railroads owned 193,000 miles of track covering the United States, more than 10 times the mileage built in the railroad’s earlier heyday in the mid-1850s.

---[End Quote]---

And an example from the steel revolution...

---[From Intel Annual Report 2001, page 5]---

The steel revolution

1. birth. By the 1870s, innovative process technologies enabled mass production of low-cost steel. In the 1880s, with ongoing investment and cost management led by Andrew Carnegie, growing demand for steel rails made the United States the world’s largest steel producer.

2. turbulence. In the 1920s, steel makers added capacity to meet projected demand for the auto industry. Instead, due to the Great Depression, the U.S. steel industry crashed along with the rest of the economy. U.S. production plummeted from 61 million tons in 1929 to 15 million tons in 1932.

3. build-out. The steel industry continued to grow, with further investment and deeper expansion into industries such as auto, construction and ship-building. The older Bessemer process was modified to use pure oxygen instead of air, increasing efficiency in production and setting the stage for extended strong output across the industry. By the mid-1970s, U.S. annual steel production was nearly 10 times 1932 levels.

---[End Quote]---

Which leaves us to where we are today...

---[From Intel Annual Report 2001, page 6]---

The Internet revolution

1. birth. The invention of the integrated circuit was the first of a series of defining innovations that ultimately fueled the Internet revolution. Excitement over powerful microprocessors, PCs, software and the emerging Internet economy all contributed to the high-tech boom of the 1990s.

2. turbulence. In 2000 and 2001, as many dot-coms failed to turn a profit, investor confidence slipped, triggering meltdowns throughout the technology sector. Nasdaq* stocks lost 70% of their value. Facing excess capacity, many companies cut back on their information technology expen-ditures, and the semiconductor industry entered its worst downturn ever.

---[End Quote]---

If history is any guide, then I think the new economy sector is set for much growth in the future. The Intel report points out that even though there are 500 million PCs are in use worldwide, only 10% of the world population are online so far. There is plenty of room for growth.

As for whether the economy would come back if it wasn't for 9/11... I don't claim any ability in market timing, so really don't have anything intelligent to say, other than I think accounting scandals and a general overvalued stockmarket contributed more to market declines than terrorist attacks did.

- Thomas Rice.

Thanks for sharing that fascinating info....
 

Hi Thomas,

Thanks for that interesting and helpful reminder of history! I think there probably is a pattern there we can learn from....

I think as long as you stick to solid investment principles you can do okay in the long run....

I'm not a "speculator" and most of the "tech boom" was a speculation bubble on unprofitable companies.... Some people made a lot of money, and others sadly lost their life savings.

But there were exceptions to this pattern - some companies were and are profitable - and it's the companies which continue to grow their profits which are the ones to watch....

Thanks Thomas!

- Dien

Re: Is the "New Economy" coming back?
 

> Well, " Wired " magazine is
> arguing that the "new economy" is
> coming back.... The "recession"
> we're in is a shallow one, and we're back on
> the way to prosperity.

I agree.

> I don't expect we'll see the ridiculously
> high valuations which we saw before - people
> will be a bit more sensible. But I do think
> there will be growth....
> - Dien Rice

I've developed business websites for a number of people over the years. Before the dot com "crash" SOME people were literally throwing money at me. "Here," the would say, "put this up on the web for me. I need to make some money."

I get paid to do as I'm told -- not to question customers on how they think their idea is going to make them any money. Many of them could care less what I thought, and I'm not a marketing "guru" so there wasn't any need for anyone to listen to me.

The dot com crash brought reality "home." Many of these customers ran out of money and closed their shops. I know I certainly felt the "pinch" because the amount I was making dwindled away to the point where I actually had to go get a "job."

Eventually things picked back up. I can honestly say that business is much better then it ever was before. But there is a new breed of "entrepreneur" and these "mutant entrepreneurs" are much better prepared, have done their homework, and are willing to ask questions and learn. These people are NOT throwing careless dollars around, and they're learning to think and plan before they take action.

Best Regards,
Steve MacLellan




homebusiness-websites.com

Re: Do you agree with Boris...?
 

Hi Boyd

>Do you agree with Boris's assertion in message #32 in the list of messages linked to below?
>Message #32 is addressed to "Eric in the Ozarks" and is signed "Boris."

I checked it out, but I never use any of his ideas about the stock market.

There is some things I never do. That is I never read brokerage house analyst reports,
stock prospectus, pay any attention to P/E ratios, or yields, to make my selection on what
stocks to buy.

The method I use is called "Kentucky Windage" and I have good success with it.

Regards,

D.R.(Don)McArdle
Stock Market Trends - Forum
http://www.network54.com/Hide/Forum/213585

I'm surprised to see the optimistic messages...
 

Hi,

I'm surprised to see the optimistic messages posted by Dien, Thomas and Steve. Being immersed in the news as I am, I find their mindset hard to share.

You brought up a good point when you asked how the U.S. was planning on paying for the several wars we've committed ourselves to.

Best,

- Boyd

News is "Child dies in bus crash" thinking
 

> Being
> immersed in the news as I am, I find their
> mindset hard to share.

Maybe if you weren't so immersed in the news you would be able to see a positive outcome.

Think about it... a bus carrying 70 people has a head on crash with an oil tanker in the middle of a crowded shopping district.

Somehow, the oil tanker does not blow up and kill hundreds of shoppers. Somehow everyone survives bar one... a 19 year old man/woman.

Technically, the 19 year old is not an adult but a child.

The news will thus report "Child Dies In Horrific Bus Crash" for no other reason than to get your attention.

The fact that 69 people on the bus lived and disaster was avoided does not matter. The news looks for the bad in everything. And if they can't find it, they put a "bad" slant on the news they do report.

If you are concerned about the stock market - and the news media knows you are - they will focus on the bad stocks and bad possible outlooks. They know, you will buy their newspapers and watch their TV shows by catering to the thing you are worried about.

It's the old story about the uneducated hotdog salesman and his university educated son talking about the recessions (what recession?), in living color.

> You brought up a good point when you asked
> how the U.S. was planning on paying for the
> several wars we've committed ourselves to.

Theory: The US NEEDS war because war means spending. Spending means money circulating in the economy. Money circulating means growing economy.

Where will the money come from? Delayed payments. Spend now, go into deficit (which has happened) and make the money back at a future date from taxes as the money filters through the economy.

Remember also, the government prints the money. So if they don't have enough "in the bank" they can just print some off and pay the contractors with printed money. To counteract the inflationary effect this has, anti-inflation policies are put in place.

Michael Ross

Re: I'm surprised . . . me to
 

Boyd

What surprises me is people don't know if the economy and stock market
is in a bull market, bear market, or if we are in a recession.

They keep saying 9/11/02 is the reason the DJIA is around 8500.
Not so . . . . "Events do not create or change stock market trends".

You will get a spike either up or down from an event for a few days,
but the stock market will always return to the normal trend it was in.

Cycles and trends get to know them.

Regards,

D.R.(Don)McArdle
Stock Market Trends - Forum
http://www.network54.com/Hide/Forum/213585