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....

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

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

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

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

> 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

Michael

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

I don't know about Boyd, but when I hear the TV News I filter it out in
my subconscious mind, separate fact from fiction, divide by two then I
have a pretty go idea of what is going on.

>positive outcome . . . . ?????

What about the mom and pop that had a nest egg for their retirement of
$100,000 in the stock market a year ago and it's now $40,000. As they are
looking for a "positive outcome" it goes to $10,000 or even lower.

Regards,

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

> What about the mom and pop that had a nest
> egg for their retirement of
> $100,000 in the stock market a year ago and
> it's now $40,000. As they are
> looking for a "positive outcome"
> it goes to $10,000 or even lower.

Big falls in the stockmarket happen from time to time when the market is overvalued. There is a floor on how far it can fall, however.

Stocks, after all, are just claims on ownership in real businesses. Let's suppose you have a business earnings $100M per year, and in 2000 it's in the market at $2,000M. Perhaps that's too high, and it drops to $1,000M, a huge 50% drop. While that's huge, it would never drop to something like $500M without a change in the underlying business fundamentals, because if it did, a large investor or group of investors could just buy the company and realise those cash flows themselves for a high return.

So, unless you believe that the fundamental cash flows / earnings underpinning all US stocks is set for a plunge, then there is a "floor" that stocks can go to.

- Thomas.

Don:

> What about the mom and pop that had a nest
> egg for their retirement of
> $100,000 in the stock market a year ago and
> it's now $40,000. As they are
> looking for a "positive outcome"
> it goes to $10,000 or even lower.

And what about the other mom and pop who actually bothered to learn a little about the stock market before investing their money. They have the same stock, but instead of watching it tumble down they short their stock and make a bundle.

And what about the other mom and pop who know that the Dow is "just an average of selected companies," as they tell their grandkids. They invest in companies not attached to the index and the price of their stock goes up!

Or the mom and pop who didn't sit by like statues watching their stock become ten percent of what it had been, and sold their stock when it hit $90k.

Michael Ross

Hi Michael

I agree with you 100% on your three remarks. I call that "thinking smart".
Knowing the market trends and knowing when to get in or out will make
or save your money.

Thinking positive is no help when the ship is sinking.

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

> Don:

> And what about the other mom and pop who
> actually bothered to learn a little about
> the stock market before investing their
> money. They have the same stock, but instead
> of watching it tumble down they short their
> stock and make a bundle.

> And what about the other mom and pop who
> know that the Dow is "just an average
> of selected companies," as they tell
> their grandkids. They invest in companies
> not attached to the index and the price of
> their stock goes up!

> Or the mom and pop who didn't sit by like
> statues watching their stock become ten
> percent of what it had been, and sold their
> stock when it hit $90k.

> Michael Ross