I’ve been surprised how few people are blogging about the current market situations. Its coming up in casual conversation “around the water cooler” and dominates the news channels, but tech outlets aren’t jumping on the bandwagon.
Today on CNBC’s “Fast Money”, following todays almost 700 point drop, bringing the Dow under 9,000, I heard the first mention of the word “crash”, or more properly what they called a “cascading crash”. IBM perked up shortly but Forbes is saying IBM won’t save tech. Sun shares are back to pre-reverse split levels at $5.21 a share, an 8% drop thats in line with most other tech stocks today.
Despite the markets falling apart it seems to me that most “joe 4 packs” (I drink Guinness) are trying to stay calm. The big question that folks are trying to avoid is at what point will see jobs being cut as a direct result of the markets. So far the people that I’m talking to aren’t freaking out but seem secretively concerned.
The industry wisdom seems to be that this is yet another situation where using technology as a competitive weapon and means to reduce cost may save the day. So far thats what “they” are saying but we’re not seeing the effect quite yet.
As for myself, I’ve been blessed so far. When we recently bought our house we liquidated most of our equities and now have some to give back. I’m jumping on the Buffet bandwagon and looking for value, given that we have very little now to invest, and yesterday picked up some GE shares at a great price. Even though GM and Ford are in the tank and dropping quickly, it looks like a great value for a long horizon investment.
So drop a comment, as a time capsule to ourselves…. how are you feeling about the current financial crisis and its impact on your livelyhood?
I wouldn’t get into GM or Ford – their liabilities to their pension funds exceed any money they are ever going to make and bankruptcy is inevitable, which means shareholders are wiped out. I can’t understand why people are still prepared to buy their stock at all.
Chinese and Middle Eastern sovereign funds are going to make a killing buying blue-chip US corporations at rock-bottom prices.
As for technology, I believe this recession is going to cause a mass adoption of open-source software because IT departments will simply have no choice in the matter. Open-source does nothing for revenues, however, and is not going to revive the market valuation of software companies, quite the opposite.
I’m not in the business of giving investment advice, and after this last month, I’m apparently not qualified at all! But I don’t get investing in GM and Ford. I still believe in tech, and expect some of the prices we’re seeing will look like sales in the future, I just don’t know how soon. I’ve probably lost between 25-35 percent in both my 401k and my personal eTrade account this year, and the last 30 days have been brutal. Without getting political, all I have to say is that change can’t come too soon.
I’m one of the worried folks, keeping it internal for now, but still making financial choices with the worst in mind.
I really can not complain since I liquidated all but a very small JAVA position late last year. That holding is more sentimental than anything since SUNW was the first stock I ever purchased. I wont go into when but lets just say I was working on the early NSF-NET at the time.
Really though. If you can stomach the market and let it sit for a while, now or close to now, is the time to buy. Heck, I just bought a house and I am not worried for the most part. Sure, I will have to cut back on my indulgences but it needed to be done in any case. One other stock I am keeping my eye on is QWest. I am feeling like there should be a takeover bid or merger for them sometime soon. They are just too small to compete with the really big boys and to big to be nimble and cutting edge.
Technology probably will not get us out of this mess. It will help though just as it helped get us here. It did come to mind on my way home tonite that IT people will have to start focusing on more cost effective solutions. Hardware, Software, and Practices. It seems to many people really don’t really know what that means though. For instance. I see so many companies that I deal with leasing computers for office workers. I don’t care how much of a tax write-off they think it is worth it is still far more expensive in the end. And in the end you have to buy or lease another computer. And that cycle seems to be 3 years. Who needs a new computer every three years? Another example. I just caught an article that mentioned that Citrix is allowing a $2500 stipend for employees to buy a laptop every three years. Uhm. Where do I sign up. First, everyone reading this should know that would amount to an expensive laptop. Second, isn’t this Citrix? Meaning that the applications should reside on a central bank of visualized sessions. What in the world would you need such a powerful laptop for.
I could go on but this is just supposed to be a comment. But one more thing and this is for Ben. Keep up the interesting blog posts.
What me worry? Markets go up and markets go down. Worrying that all of this might cause me to loose my job down the line won’t help.
Here’s my prediction, the market will come back someday. Some people will get rich from all of this. Hopefully you’ll be one of them Ben!
Yep… markets bounce back provided people don’t monkey too much with them in the mean time… so far I’ve lived through (that I can actually remember) 3 major market corrections in each of the past 3 decades… each time the market comes back fairly quickly… anyone remember 2001-2003?
As Ben said, it’s a good time to get some bargain value stocks… GE, 3M…
Good for you Ben!
For the business owner or personal get out of debt ASAP. For the value investor now it the time! This is gonna be a rough 2-5 years for many people. The stock market will pick up a good portion of the losses though. DOW 10k by 3 years.
I’d wait till the beginning of 2009 before going on a buying spree. I doubt we’ve seen the bottom of this market yet. I wouldn’t be surprised if we see a DOW at 6000 or less. Careful catching those falling knives.
LarryD: I like your comment about catching falling knives. I still think we haven’t hit bottom, but one thing I have learned in my life thus far is that I suck at market timing… this time I’m not messing around, especially on solid companies.
As for my position on GM and Ford; these are risky plays, but they are super cheap and GM especially I think would get government assistance before going into bankruptcy… Ford may not get as much help. Either way, throwing $1,000 into GM and/or Ford is a pretty solid bet that could have a major payoff in 10-20 years.
Right now my problem is raising capital given that I just bought a house (20% down, fixed rate, no messing around).
When you can buy shares of a solid company for the price of a latte…. its time to buy.
I think Brocade (BRCD) is a steal right now at $3.68 per share. The pending Foundry acquisition is exciting and sets up Brocade to be the only real alternative to Cisco.
The more economy drops, the higher the inflation, the cheaper I acquire stuff. And when the economy picks up again…
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