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| Making
Sense of the NEXT Economy |
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After
Shock
(Please note: this
was written 8 years ago - notice how the principles have not changed in
relation to the Economy meltdown of 2008) Many
predicted the Internet bubble would burst, and it did. Some
got out relatively unharmed and others were not so fortunate. Most saw their
portfolio evaporate in just a few short months. Many are sitting
shocked, scared, confused and downright suspicious about where to invest
next. Now
What? So
if the NEW economy is dead, what is the NEXT economy? Where can
one capitalize on the "after shocks" of the new economy One
thing for sure, with all the doom and gloom about, the majority of investors
are going to bury their head and wait out the storm. We see this as
dangerous. Now is the time to be looking for those golden
opportunities on the horizon. Most investors wait until the masses
move. Safety in numbers they think. Not totally wrong, but why not
scan the NEXT Economy now and strategically plan your moves in
advance.
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NEXT
Economy Future Predictions
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| Now
What? |
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NEXT
Economy Future Predictions
Technology
Breakthroughs
- Research
experts are close to perfecting the molecular structure of new and
novel organic structures to produce organic semiconductors and
plastic transistors. Historically, plastic was not known for
it's ability to conduct electricity. But, once this technology
is finalized, it will allow for a whole new generation of computer
components, household appliances, office devices and toys. In
other words, inexpensive, throwaway plastic semiconductor chips,
equal in speed and power to silicon circuits now used to run laptop
displays.
Bell Labs recently licensed it's plastic transistor technology to http://www.eink.com.
E-Ink makes electronic ink and displays. At the current time,
E-Ink is privately owned.
Others in the next-generation chip race include Philips Research and
IBM.
Our prediction is that plastic electronics will revolutionize
the digital market in the next five to fifteen years. A lot of
money is going to be made for the smart investor who closely follows
this opportunity.
Watch here for more information on this revolutionary paradigm shift
in the making.
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| North American investors may want to ready themselves for growing disappointment despite the anticipated rate decrease. |
The Nikkei 225 closed today (3/14/01) at 11843.59. Amazing what high interest rates can do to a stock market isn't? The Nikkei index is 70% below its close in 1988. Current interest rates in Japan are low. So low they are a non-factor.
Why then the irrational belief in North America that lower interest rates will boost the North American exchanges. Put differently what's so different between the world's 2nd largest economy and the largest? In my opinion, nothing. At issue today is a readjustment in thinking of the importance of earnings. Going forward, what is the investor prepared to pay for less and less earnings. How many companies that have provided guidance for increased earnings are suffering? If a stock is worth $10 on day 1 and earnings drop 25% on day 2, is it not natural that the Company would drop in value to $7.50 (without regard to other variables such as: management; performance vis-a-vis prior guidance, etc.). Interest rates may indeed affect interest sensitive stocks (banks and insurance companies and utilities that may have high yielding dividends) but outside of that relatively small group, who's affected. An argument could be made that consumer goods (merchandising, retail and some integrated manufacturing) would decline with higher rates.
There could also be an argument that technology stocks suffer with high rates due to a lack of consumer and corporate borrowing (read spending). But just a second. It wasn't that long ago that Japan led the world in technological development. It still has fine technology companies that dominate global markets. Why hasn't the Nikkei taken off in the last few years with the ever declining Japanese prime lending rate? I don't know why the Japan market still struggles, I just know that lower interest rates may be a mirage and North American investors may want to ready themselves for growing disappointment despite the anticipated rate decrease.
Charles von Ryan for FUTURECents.com
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