5 replies to this topic

[greenie]

After talking to people and reading several newspapers and articles, following 'clear' picture emerges about the future direction of the world economy over next 30 years. India and China are two emerging giants of the world economy. They are like Japan of 1960-70s, and therefore have tremendous potential to grow much further. India and China are just emerging from their underdeveloped conditions, and therefore the boom will last very long. Imagine how many cars, computers or fridges the new middle-class of Chindia will buy in the next 15 or 30 years, as they get richer and richer. All global companies and especially the US multinationals will continue to benefit from this boom. Imagine how many power stations GE will sell, or routers Cisco will sell as Chindian economies grow to get similar to US or Europe. To add to the benefit, India is a democracy. As we all know, democracy is the best political system with ability to resolve any economic or political crisis. Only rate-limiting factor is energy. As the Asian countries grow, there will more and more demand for oil, and we will run out of the current reserves very well. Investments in alternate energy sources will pay off big time. In this global picture, US housing bust is just a local problem and will be cured soon, or in any case will not have much impact. Metaphorically, it is just a pimple on the globalized elephant's @$$. I hope I presented the consensus picture for next 30 years reasonably well. Future looks very bright. Any 10-15% pullback in S&P (if it comes) is an opportunity to accumulate.

[pdx5]

US economy and US stock market are both long in the tooth. Unless a law has been passed to banish recessions, one is due in 2007 or 2008 by the latest. A 10%+ correction has high probability in 2007. But crash (sudden drop of 15 to 20%) has very low probability. The only way we get a crash is if there is another 911.

[hiker]

what does a growing middle class require?

life insurance and annuities and other retirement/investment products -

http://stockcharts.c...allery.html?lfc

currently on a PnF sell signal and price resides below many horizontal S/R levels....

consider buying if 32-38 zone is ever retested...or buy on sustained moves above the horizontal areas of importance -

$52.92
49.14
36.90

"beta" brought this play to the attention of this board in the summer of 2005.

Edited by hiker, 24 January 2007 - 06:17 AM.

[2cents]

[ I hope I presented the consensus picture for next 30 years reasonably well. Future looks very bright. Any 10-15% pullback in S&P (if it comes) is an opportunity to accumulate. [/quote] Greenie Always respect your point of view, but, what makes you think that all these U.S. companies will participate in this growth cycle? CSCO has been losing share to a Chinees company for years and is no longer a factor in China or India. The Japanees have been supplying the power systems so far. China is now making a lot of cars and Japan and Korea are currently dominent. China is the leading manufacture of computers in the world and both China and India are strong in the development and manufacturing of semiconductors. India is the fastests growing software developer in the world. Management services are dominated by GB. Heavy equipment comes from Hitachi and Kabota more than CAT now. Philips and Semins supply most of the medical equipment. Nortel and Erricson are the largest supplier of communications equipment. Your Far East predictions for growth are reasonable but to say the US will prosper from this is a long shot. SO far GE losses money in China. China and India produce 3x engineers than the US. What does that tell you. We have fallen so far behind we'll never catch up.

[greenie]

Hi 2cents, Thank you for your comments. I do not believe in an iota of the consensus picture. It is nearly impossible to forecast what will happen even next year. The very fact that a consensus is emerging about next 30 years means that most of it will go differently than expected. I listed the consensus picture, so that we can tear it apart, like you did about the US companies. Best, G.

[HoseB]

"Money Pump" economics around the world until fiat implodes. What is now, and for a while will continue to be perceived as "the good times", is later going to be properly recognized as the "bad trip"... follwed by the crash. Got gold?