re: En Fuego!"There is no evidence that Cisco, Juniper or Avici can sustain continous growth. It is surprising that we are experiencing the bubble again. The analysts and the greedy CEOs."
Mr. Max: You obviously have no idea as to why these bubbles happen and how the street works. Short sellers getting caught is one issue cited in the article; portfolio managers who are market makers jumping to where they see quality (even if the multiples are out of line) is another.
The analysts are making their best guesses as to where the business is going, as they spend a lot more time than you and me following these companies, but they are not getting kudos and kickbacks for corporate kissing-up.
The CEOs are also (for the most part) focusing on the business (which they can control) and not the stock price (which is controlled by the PMs on Wall Street). There are always a few Kozlowskis to screw things up, but for the most part, these CEOs are sharp cookies who are kept up at night thinking about how to survive.
re: En Fuego!The CEOs are also (for the most part) focusing on the business (which they can control) and not the stock price (which is controlled by the PMs on Wall Street). There are always a few Kozlowskis to screw things up, but for the most part, these CEOs are sharp cookies who are kept up at night thinking about how to survive. A large percentage of the CEOs of Silicon Valley are outright criminals.
re: En Fuego!It is surprising that we are experiencing the bubble again. The analysts and the greedy CEOs. Bobby, you are correct that very little has changed. I suspect the analysts aren't making as much money these days, but the VCs, investment bankers and corporate executives are engaged in the very same behavior that characterized the bubble. There has been no reform worthy of the name.
re: En Fuego! >Cisco, for example, was acquiring companies at >an unprecedented for the sole purpose of >enhancing the stock prices.
I believe that's called Capitalism. Although i'm not sure because the subject of the sentence is missing. It could be "an unprecedented auction" ... in which case i'd probably be wrong.
re: En Fuego! ... but for the most part, these CEOs are sharp cookies who are kept up at night thinking about how to survive.
These are the same CEOs who built very large companies in the midst of the last bubble to supply products to nonexistent markets. I would not doubt that they are kept up at night thinking about how to survive. However I do find that this is a very odd definitioon of "sharp coolie." Blathering fool perhaps but not sharp cookie.
The above is a New York Times article on the emerging Chinese bubble and the reckless behavior of CEOs that is fueling it. It is instructive reading given the recent claim on this board that CEOs are 'smart cookies.' What is alarming about the current Chinese bubble is its similarity to the recent optical networking bubble in Europe and the United States. The same rush to invest on the conviction that growth will obviate all mistakes is there in both cases.
If teh Chinese bubble bursts or more correclty when the Chinese bubble bursts the telcom market will be quickly dampened.
re: En Fuego!"The above is a New York Times article on the emerging Chinese bubble and the reckless behavior of CEOs that is fueling it."
This article is a typical lazy western analysis of China., i.e., trying to fit China into a theory/pattern they know.
China is not in a bubble, and it is very different from all bubbles mentioned. China has been growing 8-10% for more than 20 years I expect it to continue for another 10 years in a slightly slower pace. Right now it has just entered steepest phase of development. China doubled PC sale ( 25M for 2003 compared to about 40M for US ), added 80M new cell phone users in 2003 (now total of 280M, comapred to 180M in US, and expressway has reached a total 30,000 km (#2 in the world, built mostly in last five year) comapred to US total of 80,000km and Canada (19,000km, #3).
But, 300M-500M rural people are scheduled yet to enter its dynamic economy and to become consumers in next 5-10 years. What over-capacity? In 10 years, who cares about 200M consumers in US. Export to US would account for less than 5% of China's economy, and China would import a whole lot more high-tech stuff.
Speaking of importing high-tech, China is ready to decide on a possible $40B Meglev (from Germany) or $15B TGV (from France) from Beijing to Shanghai.
The real problem for China is not bubbles or reckless CEOs. It is about energy, raw materails, etc, the resources needed to sustain further developments.
Maybe time to get into electric car and battery tech business.
re: En Fuego! China is not in a bubble, and it is very different from all bubbles mentioned. China has been growing 8-10% for more than 20 years I expect it to continue for another 10 years in a slightly slower pace. Right now it has just entered steepest phase of development. China doubled PC sale ( 25M for 2003 compared to about 40M for US ), added 80M new cell phone users in 2003 (now total of 280M, comapred to 180M in US, and expressway has reached a total 30,000 km (#2 in the world, built mostly in last five year) comapred to US total of 80,000km and Canada 19,000km, #3).
Let's hope China keeps its pace, and keeps buying from Silicon Valley for the next 3-5 years. The biggest problem for China now is not its highway and telecomm infrastructure, after the build up during the last 10 years. It is energy, electricity, raw materials -- natural resources! China is planning to build 35 nuclear power stations in the next 20 years to keep up the pace, along with numerous hydro-power stations.
The big question is whether India will follow the same China has gone through - i.e. massive high-way buildup, massive fiber layout, buy 30million PCs per year by 2010 (5million in 2003), etc. If true, people in silicon valley will be happy, as well as Nasdaq. If not, then hard to say when Nasdaq can go. I don't think China will keep buying hi-tech from the US after 5-10 years, it will develope its own.
But, 300M-500M rural people are scheduled yet to enter its dynamic economy and to become consumers in next 5-10 years. What over-capacity? In 10 years, who cares about 200M consumers in US. Export to US would account for less than 5% of China's economy, and China would import a whole lot more high-tech stuff.
Speaking of importing high-tech, China is ready to decide on a possible $40B Meglev (from Germany) or $15B TGV (from France) from Beijing to Shanghai.
They already decided not to build MegLev hi-speed train, based on their experience from the Shanghai Pudong Meglev, too expensive.
re: En Fuego!"China is planning to build 35 nuclear power stations in the next 20 years to keep up the pace, along with numerous hydro-power stations."
Right, and car battery technology is where money will be.
"They already decided not to build MegLev hi-speed train, based on their experience from the Shanghai Pudong Meglev, too expensive."
Not ture. It is still alive. Maglev is cheaper than airplanes and consumes only 1/5 of energy. Germans are deciding if they want to let their expertise wasted or make one time deal of $40B. China will later build route from Beijing to ShenZhen or HK for $10B or less.
Mr. Max:
You obviously have no idea as to why these bubbles happen and how the street works. Short sellers getting caught is one issue cited in the article; portfolio managers who are market makers jumping to where they see quality (even if the multiples are out of line) is another.
The analysts are making their best guesses as to where the business is going, as they spend a lot more time than you and me following these companies, but they are not getting kudos and kickbacks for corporate kissing-up.
The CEOs are also (for the most part) focusing on the business (which they can control) and not the stock price (which is controlled by the PMs on Wall Street). There are always a few Kozlowskis to screw things up, but for the most part, these CEOs are sharp cookies who are kept up at night thinking about how to survive.