Comments on: The Seven Trends of the Current Economic Storm

By: jon

jon — Sat, 24 Jan 2009 03:01:53 +0000

Insightful… many believe that we are entering into a huge inflationary period. This is due to massive government bailouts and weakening faith in US currency. For this reason hoarding cash can be particularly dangerous. A dollar today will buy much less next year and so on. It may therefore be advisable for those with cash to invest in non-perishable consumable goods, tradable commodities, education, and industrial tools. Invest in your home and seek fixed rate debt.

Government stimulus only delays inevitable economic corrections. Consumer spending and more importantly borrowing has been way out of control for the last decade. A correction and even and over correction is expected. Govt. bailouts ultimately take money from the taxpayer to bailout irresponsible investors, lenders, and industries. Once again, it only delays market corrections (pain).

By: Alex Nesbitt

Alex Nesbitt — Tue, 28 Oct 2008 16:11:37 +0000

Microsoft and Cisco are proven companies for the business world and have business models that work. Smaller companies that combine great products, good sales capabilities and a business model that works will make in roads.

The problem will be if they are still in the cash burning phase of their business cycle. They are unlikely to get more cash without some serious dilution. Some good companies will get thrown out with the bath water

The other issue is that while the market is in this crazy mode decision making will get deferred, and that means the sales cycle just got extended by another few months for many deals. That’s always bad for anyone with a product to sell.

MS and Cisco have scale in their sales force and the money to whether a slow down. Many of the web 2 companies have great product, but no scale in their sales forces. You need scale in your sales efforts to crack the enterprise market effectively. I would look for someone to consolidate some of these product based companies and roll them up into something that has critical mass.

But we have to find the bottom first.

By: Beth W.

Beth W. — Tue, 28 Oct 2008 14:56:37 +0000

I think that web 2.0 start-ups will finally start to eat away at the Microsoft’s and Cisco’s (GoToMeeting and WebEx) of the business software world. The much more flexible and affordable Zoho’s, Yugma’s and Skype’s might do to the software giants what cable has done to network television or what the internet has done to video rental.Granted, VC money is hard to come by but I think people, desperate for cost-cutting solutions, will finally realize that they can get their software for thousands of dollars less then what they have been paying. Any thoughts on this or is it just wishful thinking?

By: Alex Nesbitt

Alex Nesbitt — Fri, 24 Oct 2008 18:44:07 +0000

I don’t think consumer spending will get us out of this. The consumer is out of gas.

I think it will take massive government stimulus and investment tax credits to get businesses to spend their cash on replacement assets.

By: Anjali

Anjali — Fri, 24 Oct 2008 18:12:18 +0000

Interesting post. It’s rather depressing to hear of the recession but I suppose there is no point trying to hide from it. I think, though, that there has to be some stimulus to invest and start the economic cycle moving on the upward trend again – there has to be a way out. Do you think that online spending will be sufficient to drum up investor interest/enthusiasm to pull the economy out of this situation? I’m pretty undecided at this stage so I’d be interested to hear what you think.