One sector that doing great

Crime, in all its forms.

EVerybody go out and buy

a new PC with Vista on it and then everybody will be happy again, especially the far eastern companies who make most of what we buy these days.

Unless you do the cost/benefit analysis first, in which case you won't do it and nor will any sensible person who already has a working PC.

Hard times ahead for the tech sector and others. But then the credit/property/hedge bubble was never going to end nicely.

Could be worse

You could have invested in banking stocks a year ago. Or put some of your retirement dollars into ethanol stocks 2 years ago. Some of us did.

Is it just me, or does it seem like the grasshoppers are playing it smart spending their money now, while I'm being played for a chump? It looks like the millenials may be onto something (they're spurning the market to a sharp degree).

In Mortis Lucrum.

Take my advice: offload the tech stocks and invest in those legal/conslutancy businesses that offer a range of bankruptcy-management services.

@AC: Warren Buffett, the sage of Omaha

You're nearly on the way to making yourself rich, much like Mr. Buffett. Once you know that most of the stock market is based on psychology, and nothing else, then you can start looking beyond the share price.

You need to look for companies that are making money, but who's share price has tanked. Nobody who's making real money ever went bust.

Tech Bubble 2.0

Is gonna hurt more than the first one. In Y2K I had share options worth $5000 then cashed them in 2 weeks later for $800. The price drop was largely because the CEO had cashed in his overpriced shares for $100 million and promptly retired to California. Bastard.

@AC origin of stock market

Stocks were originally conceived to share risk when trading with India. Anybody could send a boat over there to trade local goods for things which were rare over here, but the reason indian dyes, spices etc were rare over here was partly the hazardous waters boats had to sail through. For small traders one shipwreck could lose you everything. So people started grouping together and trading equal shares in each other's boats such that the risk of one shipwreck wouldn't clean anyone out.

Pretty quickly people came to realising that the pieces of paper promising 25% of the profit of the good ship Paris Hilton was worth a lot of money and, when your eldest daughter was getting married or your home needed a new roof, it was convenient just to walk into a local chocolate house and see what people would offer for it. Thus the stock market was born and the East India Company grew to prominence.

Stocks never actually had a fixed value, those were bonds. Stocks have always been chaotic and never really evolved past the shady haggling in dockside taverns under the watchful eye of gold-digging seamstresses.

Its all based on hot air ....

The Shares and the actual value of a company in the tech area have no relationship.

Sun was pre the crash worth an unbelievable amount of money based on what? Sparc and Solaris? Now they have an extended protfolio and they are in the penny stocks range. Google - what are they selling?

Analysts predicts what companies will do and then when they don't penalize them?

We have an oil price at $140 without any real delivery constraints or new wars, housing prices went nuts based on motgage lenders stupidity - why are we surprised.

Next big one - carbon trading - now at least we know that smoke is mostly hot air and carbon - so at least they are pretty open with that scam.

Economics is all wrong

Economists measure bullshit indicators like GDP which are easy to measure, but are poor indicators of true economic performance.

One of the largest industries that drive the US GDP is the health industry. By these measures, the health industry is making the US rich.

But, hang on, surely high health care spending should be made possible by a healthy economy. Healthcare is a drain on the true economy and should not be a prime driver.

"We are rich and can therefore afford to spend on healthcare" makes sense.

"We can afford to buy food, cars and houses because we spend so much on healthcare" does not.

What is making the USA appear more productive is the high cost of USA healthcare relative to other countries. An operation that costs $1000 in India costs $25000 in USA. Therefore the USA is 25 times more productive (as measured by GDP) than India.

Tech stocks might fall, but they will be replaced by stocks in healthcare and other areas.

With such out-of-whack indicators and measurements, is it at all suprising that the bean counters don't see a shift in the wind?

@EVerybody go out and buy (Vista boxes)

Yes, please do... I'll despise working on them, but it will guarantee job security if nothing else. Long as I get to keep my XP and Linux boxes.

The stock market.

Billy Ray Valentine: Okay, tech stock prices have been dropping all morning, which means that everybody is waiting for them to hit rock bottom, so they can buy low. Which means that the people who own the tech stocks are saying, "Hey, we're losing all our damn money, and Christmas is around the corner, and I ain't gonna have no money to buy my son the G.I. Joe with the kung-fu grip! And my wife ain't gonna f... my wife ain't gonna make love to me if I got no money!" So they're panicking right now, they're screaming "SELL! SELL!" to get out before the price keeps dropping. They're panicking out there right now, I can feel it.

Randolph Duke: He's right, Mortimer! My God, look at it!

Mine's is the grubby Santa-Claus costume with a whole smoked salmon and an .45 in the pocket.

Re: I'm confused by share prices

You shouldn't be, the stock markets, and share prices in general are pretty trivial. You are quite right in the assertion that they are about generating money for companies, but unlike corporate bonds, money made from IPOs is generally not repaid. All you are buying is the income stream from dividends. Now, unlike Bonds, that income stream is not fixed up front - it's up to the company to set it.

Now, the secondary market (which is what the stock market is) is a key part of the system. If you didn't have a secondary market, people would be less willing to part with money at an IPO, since they would have no way of getting the capital outlayed back. The liquidity of shares is a key part of what makes them popular. Your capital doesn't have to be tied up for a long period of time.

And your assertion that it isn't possible to dump big positions isn't true. So long as you trade out of positions over enough time, you can do so with minimal market impact. Big hedge funds and pensions funds do this all the time. Every time a stock enters or leaves the FTSE 100 a whole stack of index tracker funds will trade in and out of huge positions, without overly affecting the market.

So, finally, how does the stock market price shares. Well, it's all based on the efficient market hypothesis. The market is going to pay a reasonable price depending on how many people are willing to buy or sell. That to a large extent is based on 2 main things: what the people in the market think the stock will be worth in the future; and what the dividend stream looks like. For an established company with a dividend stream, analysts often estimate the price by using a discount of future earnings model. So a dividend 20 years down track is worth the dividend you expect to be paid in that year (at least an estimate of it), discounted by inflation for each intervening year. You can sum all dividends up from now until the end of time, and that is the stock price. For a company like Google that has yet to pay dividends, you are looking at their growth model and trying to predict when they will start to pay dividends, and what dividends they will actually pay. If Google growth stops significantly, and they don't start to pay dividends, their share price would tumble. Remembering that all the top people at Google have a large section of their own money tied up in shares means that Google won't want that.

Of course, the reality is a little more complex, but the basic principles are simple.

The View from other There .... the OverKant*

"What is making the USA appear more productive is the high cost of USA healthcare relative to other countries. An operation that costs $1000 in India costs $25000 in USA. Therefore the USA is 25 times more productive (as measured by GDP) than India." .... By Charles Manning

Posted Wednesday 16th July 2008 02:08 GMT

I would agree with you, Charles, that it is an Apparition which Burdens Great Games Play with 25 times more Inefficiency and/or Insufficiency than India (as measured by GDP) .... which is a Crooked and QuITe Inappropriate Yardstick by which to Think 42 Measure anything of Deep and Significant Intrinsic Value.

* Honey Bear Baiting, Flying dDutchman Stijl ....... Tentative First Steps in Harry LimeLight through to Dark Matter Masteries in the Most Original and Ancient of Earthy Mysteries ...... The Pleasure of Viceless Sins ...... Zero Collateral dDamage.

*Daniel in the Lioness's Den? :-) ... http://www.youtube.com/watch?v=Y_HaXCCjSD8

Wow, something ESPecial to Live for.

Time to buy a tent?

Buy a tent and an airgun a solar panel to run your laptop, then head to the hills?

Can it be as bad as he is saying and not get a lot worse?

Stockmarket bears no relation to reality: it is just seen as an abstract

When the Paxman underpants e-mail broke, M&S shares fell 9 points. However, the other day women compalined about bra prices (i.e. a bigger bra cost £2 more for each bigger size, but not clothes), the share value went up a couple of points. Governments like to think they have control over the economy and jobs, the reality being the opposite, the irony being that most of them studied economics along with politics and philosophy at Oxbridge (the only two that teach such an educational package).

This is why the stock market needs to be destroyed

I mean completely, utterly, obsoleted.

Its nothing more than gambling for idiots. Except that the real losers are innocent employees axed because of some mythical number on a board somewhere that was influenced by some moronic exec or newspaper headline.

I can't understand why companies continue to take part in such a ridiculous scheme. Oh wait, yes i can, a quick payoff. Fucking America.

Meh, whatever

Pretty much the whole market is near a 52 week low, so singling out a few stocks and mumbling about it being the end of the tech world is ludicrous.

Also, as mentioned by plenty of other people here, stock market valuations don't mean Jack. Stock prices, like house prices, are going down because no-one wants to, or can, buy them, not because they have suddenly become less intrinsically valuable. It's a bear market Ashlee.

Paris, because she understands that prices go down as well as up.

PCs are now fast enough

Unlike in the past when you were dissatisfied with your PCs performance and you were constantly thinking about upgrading memory/cpu/graphics purely to achieve what you do everyday quickly, if you have a recently purchased PC then it will do virtually anything you can throw at it with satisfactory performance.

The only sector where this is not the case is gaming, but lets face it, the prospect of buying 2x $200-$500 to play the latest $50 game is not something Joe or indeed Jill average is going to do. New software releases don't offer the huge steps forward that we have seen in the past and many people are using OSes and production software that is 5 or more years old. You can now buy an affordable machine that will actually have more memory than the leading OS can actually use. If the tech market is to be boosted then a high demand (in terms of hardware) killer app and or OS is needed pronto, plus it needs to work as advertised (take note MS), I find it interesting that the eee machines have garnered such interest, I see this as confirmation that the general user is pretty much happy with the hardware they use everyday and are spending their upgrade bucks on toys not always in the tech area.

Paris cos her toys vibrate, that's when the ringer is turned off.

Efros

Economics

If economists were so understanding of economics how come we end up in this shit every 20 years or so.

Efros

@ AC

Touche my good man! But Ah, Do we not seek alternative means to make exponential funds in unclaimed territories? Housing was good, and then EVERYBODY jumped on board, and it got bad, and everyone got off at the next stop. Dropping the housing market seemingly overnight (and at the expense of many "false" mortgages) Tech stock were good in the late 90's, and everybody jumped on board with whatever pennies they could scrounge up. And then they realised they were buying stock in the 15 year old next door, and EVERYBODY got off. No, I repeat NO economic indicator, Can judge a fad or "Trendy" Economy. Which is how we got to where we are. People buy into something because somebody else made it profitable, and then try and take the reigns themselves with false hope that can keep you up for awhile, but will inevitably bring you down (The higher you are, the harder you fall). Old adages such as "putting all your eggs in one basket" Have been around for ages for very good reasons. Do I have a solution to fixing the human pysche? No, not at all. People do what they think they have to do to strike it rich. But I will always tell people to invest in an economic foundation, and Play with as much as your willing to lose. Until people do such, and until other people stop INFLUENCING people to do otherwise, We will have the rollercoaster that is the current economic situation.

Because I never took college econ, but I am not a blind puppet.

@Thomas

Couldn't have put it better.

Wonder why Sam Smith's pubs are doing so well now? Because they sell (have always sold) affordable beer. Just because it's not your trendy label £4 a bottle (half pint), doesn't mean it's crap 'cos it's also very good quality beer, just not advertised.

When people have cash, they will splash, but for what advantage?

Meh, it's still pants if I lose my job because of sheep mentality at large.

It's All Opportunity

Sometimes you have to get a slap in the face to realize the current strategy no longer works.

These companies can survive and even flourish. They just have to have the will to adopt the proper paradigm. Finding the right fit always the classic "agonizing reappraisal". I guess we'll see who has the balls to do take the right road.

Economies are like bowels. Every now and them they have to get rid of the crap and sometimes it's a smelly unpleasant process.

Wow. Such total and complete cultural ignorance.

@Tom

"It's really sad to see the nation which produced Adam Smith has fallen so low."

And how do you know that they're all Scottish?

The word "nation" has never been in common use to describe the UK as a whole.

Country, yes -- depending on who you talk to.

State, yes -- depending on who you talk to.

Nation, no -- unless you speak to people with less of a clue than your average 8-year-old.

doom and gloom

I think the doom and gloom view is a bit flawed.

Yes share prices are plummeting, yes oil is high and yes inflation is climbing which causes an unstable enviroment for business but.

Share prices were over valued in most industries for a long time and were in need of correction, this is now underway and an equilibrium will be found in the comming months and a more stable and safe enviroment will provail.

as global growth slows as it at this very moment demand for oil will plummet and so will its price just that a time when production is being raised! opec are resisting raising output for this very reason.

as sterling corrects itself all of a sudden we are becomming more viable as a country, British manufactuiring may even return! in the tech industry we may well see many of those offshore jobs comming back over the next few years as we become more price competative.

In summary what is happening in the world at the moment is good for britian and the tech sector in this country. Finally wiping away the damage Mr brown has done the cost for this will be picked up by the banking sector and home owners. then it's back to business...

Stock market

Where tasty, flavour enhancing liquids are bought and sold?

Where cows, pigs and sheep etc. are bought and sold?

Where cut and shut cars are sold for banger racing?

Where distressed inventory is sold?

Where imprisonment devices for public merriment are sold?

A: none of the above.

Real A: Where smoke and mirrors are bought and sold.