Is the Global Economy About to Crash?

washingtondispatch ^ | 1/26/2003 | Pat Buchanan

[SerfsUp]

Perhaps you know the answer to this:

When a small investory purchases an equity that does not pay a dividend, what exactly is he buying? Assume the quantity purchased is small -- perhaps a few hundred shares -- and therefore insufficient to obtain control of the company, or in fact any influence at all within the shareholders as a whole.

After all, no small shareholder can obtain a check from the company for an amount equal to the amount of stock he owns times the EPS. In fact the small shareholder cannot meet with senior management, or even get access to the company health club.

So what is the tangible benefit?

[maui_hawaii]

And what a coincidence that a historical fair-value P/E of 14 puts the Dow at 5309. Hmmm...

If they get the dividend tax cut the Dow will drop, thankfully so, hopefully to about 5,000.

The Dow is not the economy. The rationale that has been in place for a decade is failing us, and we need to change it. Corporate finance and investment needs a new face and mode of operation.

[razorback-bert]

So what is the tangible benefit?

With fixin's and Roux, they can be mighty tastee.

[SerfsUp]

With fixin's and Roux, they can be mighty tastee.

That's what I thought.

[Pelham]

Yup. But as you know, it's not FR PC to acknowledge he's ever right about anything.

[ContentiousObjector]

I am not a brain surgeon, but I am an economist by education and Pat is right on.

However this does contradict things he has said recently

[Red Jones]

Buchanan is by far a better choice than anyone put forth by either of the two major parties since reagan.

Buchanan missed the peak in his stock portfolio, true. But he got out above the current value in 97. That means he beat the stock market average over a period of 5-6 years. The conventional wisdom will under-estimate buchanan's wisdom at everyone's peril it seems from this track record.

But at the super bowl party I was at I met someone who said business was good. They were in the property liquidation business. So, I guess some people are in the right business.

[TigerLikesRooster]

RE #16

When I thought the market would go under Dow 6,000 and possibly under 5,000 before it recovers back in '98-'99, I could be called one of the hard-core "doom sayers". Now I find that I was acually too optimistic.:)