|
PureBytes Links
Trading Reference Links
|
I think you make a good point that productivity is not increasing across
the board and certainly mergers and stock options are masking real
changes in costs and pricing power. My comments regarding productivity
were directed primarily to the primary and secondary effects of
reduction in the length and breadth of the distribution channel and
secondarily to the effects of reductions in paperwork and administrative
record keeping. With respect to the former, the new technologies and the
internet have made it possible to stretch "Just In Time" distribution to
build to order ala the Dell model. With respect to the later (as an
example), the return to the central filing model (ala the old
mainframes) updated with internet access and pervasive communication
continues to provide huge opportunities for reduction of administrative
costs - imagine (for example) what this will eventually do for the
bloated health care field.
Now I am not for a moment suggesting that most of this is not already
priced into the technology stocks for as far as the brain can imagine,
however the momentum and creativity will continue even when the tech
stocks come back to earth. I was there in the computer IPO boom of the
60's and when the whole thing came down, the industry still continued to
create and build new software at a prodigious rate.
Earl
----- Original Message -----
From: "JW" <JW@xxxxxxxxxxxx>
To: <realtraders@xxxxxxxxxxxxxxx>
Sent: Monday, February 28, 2000 3:52 AM
Subject: [RT] RE: Re: [Fwd: Nasdaq Bubble... Something to consider]
> Be careful with this pervasive productivity argument. It isn't 100%
> accurate. Yes, office supplies can be ordered more efficiently using
> the net and theoretically, B2B auctions should help clear out
overstock
> faster. But the productivity that AG refers to is really just people
> working longer hours using the same old processes. Up until a month
> ago, I worked in a high tech company in Silicon Valley for about 1 1/2
> years. During that time the company went public and doubled in size
in
> terms of people. The stock is about 3 times the initial offering
price
> with a P/E around 80. During the time I was there, the only change
that
> MIGHT have increased productivity was moving to MS Office97/Outlook
and
> migrating some people to Win98. OH, and we redesigned our web page.
> There weren't any other company wide initiatives or process changes.
>
> The typical person worked 50 hour weeks with some working longer. We
> increased sales significantly via an acquisition, greatly increasing
> software pricing across the board each year (even though there was
> relatively little new functionality added) and by selling multi-year
> license agreements for which the customer typically paid for the next
> 3-5 years in one up-front payment. The latter point is important
> because it means that the company will not get any additional revenue
> from these customers over the life of their multi-year agreement
unless
> they grow faster than what was contracted for.
>
> To the outside observer, it looks like productivity has increased
since
> revenues have increased nicely. But it ain't true. Having more
people
> work longer hours isn't my definition of increased productivity. In
> fact, from a personal viewpoint, you are actually making less money if
> you divide out your compensation by the number of hours worked.
>
> And sadly, this type of operation and effects are the same at a lot of
> other companies. One day, the truth will be recognized. We'll find
out
> that productivity as such hasn't increased as much as supposed and
> inflation has actually been higher than reported. Then watch out
below.
>
> JW
>
>
> -----Original Message-----
> From: listmanager@xxxxxxxxxxxxxxx
[mailto:listmanager@xxxxxxxxxxxxxxx]On
> Behalf Of Earl Adamy
> Sent: Sunday, February 27, 2000 4:25 PM
> To: realtraders@xxxxxxxxxxxxxxx
> Cc: realtraders@xxxxxxxxxxxxxxx
> Subject: [RT] Re: [Fwd: Nasdaq Bubble... Something to consider]
>
>
> I buy some of the new economy arguments and see huge productivity
> opportunities which will continue to drive down costs, however the new
> economy has also opened some very dangerous pits which could swallow
the
> whole thing. Chief among them is debt, debt, debt as far as the
economy
> can see. Another is the conversion from manufacturing economy to
service
> economy which will not serve us well in a major down turn.
>
> Earl
>
> ----- Original Message -----
> From: "Daniel Goncharoff" <Daniel.Goncharoff@xxxxxxxxxxxxxxxxxxxx>
> To: <realtraders@xxxxxxxxxxxxxxx>
> Cc: <realtraders@xxxxxxxxxxxxxxx>
> Sent: Sunday, February 27, 2000 4:20 PM
> Subject: [RT] Re: [Fwd: Nasdaq Bubble... Something to consider]
>
>
> > Sorry, I just don't buy the 'new economy' argument yet. The marginal
> > pricing issue has little relevance to an entertainment product that
> > derives its revenue from advertising, like YHOO. It is an issue of
> fads,
> > combined with the difficulty of evaluating the value of net
> advertising.
> > More people on EBAY is only to my advantage if there are more
sellers,
> > and I am a buyer. More buyers means more people competing against
me,
> > and that's bad. And the success of Windows had little to do with the
> > ability to swap files- - it had to do with the economic benefit to
> > business buyers of the 'Wintel' system, where box makers were
> competing
> > with each other to provide the most cost effective box, over the
> > exclusivity of Apple, where you had to buy an expensive box to get
the
> > OS.
> >
> > It is far from clear that the advertising/data mining based business
> > model can make any money in the long term. If it can't, a lot of
stock
> > market value vanishes. EBAY's intermediation model has a reasonable
> shot
> > of succeeding if it can maintain a good balance between buyers and
> > sellers.
> >
> > JMHO
> > DanG
> >
> >
> >
>
>
>
|