Forum Archive Index - December 1999

[Phil Williams <philw@hyperactive.co.nz>]

Sarah,

This is my favourite excerpt from that Buffett script

> Move on to failures of airlines...{snip} Sizing all this up, I like to think 
>that if I'd been at Kitty Hawk in 1903 when Orville Wright took off, I would 
>have been farsighted enough, and public-spirited enough--I owed this to future 
>capitalists--to
> shoot him
> down...

And it's the most inane thing I've seen attributed to this man, who would 
appear to still be living in the first half of the century, rather than it's 
last month...

The fact of the matter  is that "long-term" for most if not all of small 
investors is 3-5 years... we're not talking about our investments in tech 
stocks being viable in 2040, we're talking about returns possible by, say, next 
July.
The way new eras are formed is by aggressive expansion and experimentation... 
the IT sector is in this phase, and in the present market demand exceeds 
supply. This means that CURRENTLY, many more than the "top few" stocks will 
give returns, as the
market will support their products.
This ain't brain surgery - its a basic look at how "wired" the world is, and 
how "wired" it will be at the "end" of the information revolution... we're 
talking powers of ten, not just multipliers.

I dispute Phil Eriksens claim that "many" IT firms are taking on bank debt - 
venture capital continues to be the fuel of silicon valley, and it doesn't come 
loaded with repayment penalties - just huge rewards for those VC companies.

He also states that these firms are supplying only the technologies of today, 
not the technologies of the future...
WAKE UP.
Buildings were not "new" in the 80's - they were simply expanding (too quickly) 
on a service in place for centuries.
InfoTech is "new" in the nineties and the thrust of leading stocks is R&D (ref 
Davids enlightening ARM information, 28% for this outperformer).
Hence - the products of the future.

By all means, read Buffett... but I think you'd be crazy in this market to 
treat him as the law. Buy your property shares, and acheive returns... but IT 
will outperform this sector 1000% in the next year.
Pick proven management and innovative business plans as you would in any 
sector, but you're a fool if, at the end of the century, you're running an 
entire portfolio without IT shares...

Phil Williams
Animation Design
Hyperactive New Media
Wellington, NZ
p +64 8019550
f +64 8019560





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