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  1. #1
    SitePoint Addict jamesglewisf's Avatar
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    Do you think we heading for a recession? It sure seems that way to me.
    Jim Lewis
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  2. #2
    Idea Developer
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    I also believe we will have a resesion very soon, and i think bush wont be able to handle it.
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  3. #3
    SitePoint Addict jamesglewisf's Avatar
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    Let's not turn this into another Bush versus Gore thread. I asked about the economy. If you want to discuss politics, start another thread.
    Jim Lewis
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  4. #4
    Misfit
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    My Mom think so. I've never asked her why though...

  5. #5
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    I have been taking this for the past three years, so I think I know what I am talking about. AT LEAST I THINK!!

    Anyways a recession may or may not happen in the coming future. We have just had an election and the politicians ALWAYS try and make the economy look it's best so they get relected. Interest Rates have started to rise to combat inflationary pressures and at this moment are stable, but if they continue to rise and the Cenral Bank cannot keep them under control we may slip into a recession as high interest rates creat unemployment, business to fail etc. etc.

    The stock market is also a god indicator. It is widely believed that the stock markets are a six month to 1 year indicator of what's to come. The stock market has levelled off and even declined in the past few months as many believe this is a sign that the investors are uncertain of what's to come in the future of the economy.

    The economists believe that the economy runs on an average 7 year cycle, which means the economy goes through the cycle of 5 periods. 1) Expansion, 2) Peak, 3) Recession, 4) Trough, and 5)Recovery.

    We are currently at the Peak of the business cycle and may be heading for a recession. What US and Canada are trying to do is control the economy with Monetary Policy(which is the money supply). If the countries are able to keep a hand on inflation we may very well slip a little, BUT not into a full recession and then back into a Recovery phase and then into more years of expansion.

    The truth is nobody REALLY knows where we are until it is over. These are just my views and the views of the college with which I attend.

    I would like to hear anybody elses opinions, as I just submitted a 30 page paper on what I discussed above.
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  6. #6
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    That's not bad thinking. I have a slightly different view of things, since at one point in the past, I was a stockbroker (got out before the '89 disaster, which really did spell the end of the big money, debt-financed 80's). I'm pretty much of the opinion that a lot of people are sheep. They perceive there to be instability, so they add to the instability by being wishy-washy with their funding choices. The fact that news (real or bogus) travels so quickly now compounds that problem. Most people understand that there are cycles to everything. Most times, you just have to wait them out. I don't foresee a real, deep recession, as some commentators have theorized. A slight downturn, though, is inevitable, given that people are starting to wake up to the fact that just because a company has a .com in its name doesn't make it some magic bullet. A deeper look at the financials would have convinced a lot of people never to get near some of those companies (unless that was their business - i.e., vc, needed a tax break).

    Measuring success these days, with new-technology stocks, sems to be more about getting name recognition only, when it used to be that name recognition led to solid financial grounding. AOL, Yahoo, Amazon: they all have the same thing in common. Everybody knows their names, but they really don't make any profits (although AOL may ace that if the Time Warner deal goes through).
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  7. #7
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    Good thing you think the same way as me. I wrote my whole report about how the technology stocks and peoples expectations have led to the last couple of years of boom and that now people are realizing they are not making a profit. That the business must actually turn a profit not just have huge expectation.

    Many of these Inernet stocks were trading at 200, 300 or more X's earnings, because of expectations. Ya right I will buy!!
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  8. #8
    SitePoint Wizard westmich's Avatar
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    Originally posted by jamesglewisf
    Let's not turn this into another Bush versus Gore thread. I asked about the economy. If you want to discuss politics, start another thread.
    On the contrary, who is going to be president and how the majority of people feel this person will handle economic and demostic issues is a major factor in the start of a recession.

    Similar to what Annette said, it is a matter of perception.
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  9. #9
    SitePoint Addict jamesglewisf's Avatar
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    Originally posted by westmich
    Originally posted by jamesglewisf
    Let's not turn this into another Bush versus Gore thread. I asked about the economy. If you want to discuss politics, start another thread.
    On the contrary, who is going to be president and how the majority of people feel this person will handle economic and demostic issues is a major factor in the start of a recession.

    Similar to what Annette said, it is a matter of perception.
    Thanks for the help. LOL!

    <edited to add "LOL!" - realized that my humor probably wasn't coming through.>

    <Edited by jamesglewisf on 12-06-2000 at 09:23 AM>
    Jim Lewis
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  10. #10
    SitePoint Addict jamesglewisf's Avatar
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    We've been heading in this direction for at least 6 months, probably even more.
    Jim Lewis
    To BE or Not to BE, or: How I Learned to Stop Worrying and Love the Barium Enema
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  11. #11
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    No way! There isn't going to be a recession. All those stupid people are just worried about the elections. I think the stock market did great yesterday and is up again today? That is because the elections are closer to finally ending. There is always that chance though, let's just hope not.

  12. #12
    SitePoint Wizard jumpthru's Avatar
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    Originally posted by webmasterlane.com
    Good thing you think the same way as me. I wrote my whole report about how the technology stocks and peoples expectations have led to the last couple of years of boom and that now people are realizing they are not making a profit. That the business must actually turn a profit not just have huge expectation.

    Many of these Inernet stocks were trading at 200, 300 or more X's earnings, because of expectations. Ya right I will buy!!
    I know, I cant belive that amazon.com was once 256 or whatever. thats amazing. now look at it...

    there aren't even any stocks that are in the 100's anymore.

    remember how well microsoft was doing? like splitting every month... now look at it.

    remember how great the stock market was two years ago...

    i think the stock market has already crashed.

  13. #13
    SitePoint Enthusiast
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    No Nasdaq stocks over 100. There are tons of the ones in the other market. One is like $96,000 I think, can't recall the name of the company though.

  14. #14
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    Just so you guys know. How high the price of a stock is not really a true indicator of the companies worth or potential. Berkshire Hathaway Inc , owned by Warren Buffet, has a stock price of $65,700. This in no way means they are a buy. They have never split their stock.

    The majority of companies will split their stock if they feel it becomes a barrier in people's minds. People think that if a stock has a high price it has already risen and there is no more room for it to rise in the future, however when a person sees a stock of a well known company for say $10 they say what a bargain. Even though that Berkshire stock may have 10X more potential to rise in the future than the bargain priced stock.

    They lower the prices of the stock so average Joe's can purchase it thinking they are getting a bargain.
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  15. #15
    SitePoint Wizard westmich's Avatar
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    Originally posted by Parker Trasborg
    No way! There isn't going to be a recession. All those stupid people are just worried about the elections. I think the stock market did great yesterday and is up again today? That is because the elections are closer to finally ending. There is always that chance though, let's just hope not.
    There will always be recessions. It's just a matter of when and how severe.
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  16. #16
    SitePoint Wizard jumpthru's Avatar
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    Originally posted by webmasterlane.com
    Just so you guys know. How high the price of a stock is not really a true indicator of the companies worth or potential. Berkshire Hathaway Inc , owned by Warren Buffet, has a stock price of $65,700. This in no way means they are a buy. They have never split their stock.

    The majority of companies will split their stock if they feel it becomes a barrier in people's minds. People think that if a stock has a high price it has already risen and there is no more room for it to rise in the future, however when a person sees a stock of a well known company for say $10 they say what a bargain. Even though that Berkshire stock may have 10X more potential to rise in the future than the bargain priced stock.

    They lower the prices of the stock so average Joe's can purchase it thinking they are getting a bargain.
    if i see a good companies stock at 10 dollars, i think they are failing...
    <Edited by jumpthru on 12-07-2000 at 09:34 PM>

  17. #17
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    It really depends. If you have some money and want to invest it you should look more into it than just looking at the price. You should look into their Debt/Equity, Price Earnings, and a few other ratios.

    For example Intel: They have been trading all over this year from a high of around $75 to a low of $35 or something. Intel has something like 600 BILLION dollars in assets with very little debt. What likely hood is it that this company will fail anytime soon. Even if technology changes they have soooooo much money they could just invest it and still make a HUGE profit.

    I was going to purchase the stock when it was at $38, but I decided to buy my new computer instead. If I had bought I would've made about 20% in a week. I feel they are still a good deal at anthing $55 and below. They are expected to rise to $110 in the next two years by all the big Brokers.

    Well what can you do. Its risky though.
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  18. #18
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    <dup of post above>
    <Edited by jamesglewisf on 12-07-2000 at 11:48 PM>
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