Forum Archive Index - December 1999

[Peter Beamish-White <peterbw@xtra.co.nz>]

This is my reasoning as to why the internet and technology boom will
lead to a bust of shattering proportions.

The internet industry is about making business more efficient and about
entertainment. There is a limit to the efficiency benefits that can be
brought to bare to business. Secondly, the organisations bringing those
benefits are competing in an industry that has low barriers to entry. 

The entertainment function of the internet competes with many other
entertainment offerors.

Consequently, I believe it is impossible that the internet companies of
today will ever achieve the kind of earnings required to justify their
prices. The realisation of this situation by the market in general will
precipitate the collapse.

This will have a reflexive effect on the underlying economies which will
suffer major setbacks.

For students of history the South Sea Bubble was a surprisingly similar
period of world history.

That is not to say that in the meantime money can not be made from it
but don't kid yourselves that there is any justification for it or you
are likely to  be left "holding the baby".

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