-Warren E. Buffett
>-Warren E. Buffett
He sure got that right :) http://www.nytimes.com/2010/11/17/opinion/17buffett.html?_r=...
"Suits make a corporate comeback," says the New York Times. Why does this sound familiar? Maybe because the suit was also back in February, September 2004, June 2004, March 2004, September 2003, November 2002, April 2002, and February 2002.
Would anyone say there's a higher proportion of PR-resistant bloggers than newspapers or magazines?
I sold all my yhoo into a strong rally in 1999 because I thought it had an outlandish price. It went on to trade for more than double what I sold it for, but hasn't ever reached that level post crash. Good call or bad call? Hard to say really but it sure seemed dumb at the time even though I ended up being right.
What counts is calibrated predictive power.
Certain political movements aside, "skepticism" does not mean "adamant denial of some claim no matter what evidence is presented".
Numerous commentators correctly identified the tech. bubble of the '90s and the housing bubble of the 2000s. However, very few of those commentators were able to successfully time the popping of these two bubbles (and the ones that did make correct predictions may have got lucky).
For my part, I don't think another tech bubble has inflated. In the '90s there were numerous companies whose entire strategy revolved around making an unprofitable business model profitable with internet magic. I don't see as much of that today. But who knows? If advertising revenue declines sufficiently, even Google could be in trouble.
But I'll still advance Bebo as the exemplar of an emerging bubble. Acquired for $850 million, sold 2 years later for < $10 million. And there's other similar cases.
You appear to be skeptical of doomsday predictions, why the caveat?
In fact, that's actually the problem with the labor theory of value. It ignores the fact that all the work in the world is of no value if there isn't someone willing to pay for it. That, in a nutshell was the crux of the dot-com bubble. A lot of people put a lot of work into making cool things, but totally ignored how much people were willing to pay. Raw enthusiasm gained them followers and investors, but enthusiasm cannot mask the lack of profit forever.
The probability that it has already started to inflate is supposed to be a lot less, but in the last decade and a half, it seems there have been a lot of bubbles in various parts of the economy.
Then it isn't.
That said, I don't think we're anywhere near "bubble" territory. If it looks like a bubble it's only because it's a less sick sector of the economy against a backdrop of a dreadfully sick economy; in the land of the insolvent the $1 profit is king.
Public companies have been sitting on their huge cash hoards (estimated at around $1 tril) but have recently been doing stock buybacks and increasing dividends.
More importantly, profitability is strongly up across almost every sector. Much of that is from cost cutting rather than increased sales, but companies that do a lot of business overseas have been seeing a better top line as well.
Sadly, none of this has helped the unemployment picture. Companies simply do not want to hire more people in the US for a variety of reasons. Debt loads for consumers is still very high and because the real estate market is still weak, people's most valuable asset is often a chain around their necks.
A rather mixed picture, IMO.