I agree. Hardware is the place to be. The bricks and mortar of the information highway are where the money will be. The field is narrowing for the top tier producers and there should be plenty of speculative opportunities for new entrants in emerging markets. Of course the big guys will eventually buy out most of them.
Competition in telecom services will be brutal. At the same time, everyone must continually invest massive amounts in their networks. Software is becoming more and more problematic, with only a few players such as Microsoft consistently making money. It is increasingly difficult to find promising companies.
As to the internet, the valuations are crazy. At the moment, it is a little bit like investing in high school basketball players. For sure, another Michael Jordan will come along, but it is crazy to bid such amounts for Amazon and Yahoo, in the expectation that they will be the next star. They have yet to make any serious money, and they have thousands of competitors nipping at their heels to take their place. While branding will be increasingly important, I am highly doubtful that they will be able to take it to the next stage, which the market is already discounting, where they make obscene amounts of money.
Steve |
