RE: RE: RE: RE: Cope -- aprovocateurBonjour aprovocateur!
Wouldn't be surprised if wireless sales declined in the recession. Now that the recession is over, the key question is how will wireless device and service sales perform in the early phase of what could be a lacklustre recovery. Seems to me that technology is driving growth opportunities, as well as opportunities to continue active price discrimination policies through the complicated product differentiation that sector critics point to.
In a general market correction, usually just about everything declines in value. The advantage of the blue chip telcomms is that they will likely correct less, continue to pay stable dividends and continue their capital investment programs unabated. Same advantages apply to utilities such as pipelines.
I hope that the cash strategy works for you. Please report back in spring 2010.
Yes, I do believe that Central Banks have done a much better job of managing inflation in recent years, in major part due to Inflation targeting policies, in part due to decreased trade barriers (lower tariffs), an increasingly global labour market as well as the declining strength of labour unions. Look at the numbers. Compare to the 1970s and 1980s.
Where you see massaged inflation numbers and government conspiracies, I see people who don't understand the measurement theory and practice. Yes, it is complicated and seemingly opaque.
Did the Greenspan federal reserve screw up? Yes, big time. The problem is that US central bank, by popular demand, still attaches much weight to economic growth where it should only worry about stabilizing the purchasing power of the currency and nothing else. Note that a rock solid currency and transparent prices will help economic growth over the longer term.
The Canadian dollar will not tank by itself. If foreign investment reverses, the dollar will decline. If the price of gold plummets and/or the price of oil drops, then the Canadian dollar will decline. If the Strait of Hormuz is closed to oil tanker traffic, the price of oil will spike and the Canadian dollar may also spike up. Frankly I would be more worried about a lofty Canadian dollar hurting non-resource related businesses in Canada and negatively impacting telcomm earnings that way.
If you are that concerned by a major market correction or W-shaped recovery or a double-dip recession, then why not load up on corporate bonds? More than a few fairly safe bets are paying ~7% yields or slightly better. Or conservative dividend-yielding blue chip stocks? hehe
cheers -TR