As usual you have given me more to deal with than my head can cope with. However here goes.
Firstly I have a healthy respect for people who have ‘been there, done that’. Talk to any old soldier who has seen combat and you get a perspective that no number of highly qualified theorists can provide. I view many of these ‘gurus’ in the same light. They may get the future wrong but it won’t be because of ignorance of the recent past, and in any case they’re interesting people to listen to.
BTW your use of the word ‘opponent’ is intriguing. Have you ever crossed swords with RR or does it just reflect the strength of your contrary views?
Anyway I can’t argue with your clinical dissertation on where corporate USA is at because I’m sure you’re right in what you say. However I rejoice in the ingenuity of my fellow man. US corporate heads will run rings around the regulators, no matter what sort of lather the SEC gets itself into. It’s the American way.
Which brings us to forward P/E’s. To paraphrase someone or other, there are lies, damn lies, and forward P/E’s. Insomuch as they are a cornerstone of fundamental analysis, they’re a great argument for T/A. Mind you they may turn out to be spot on this time. They’re a tricky lot those Americans.
I could however, take issue with your comment that the telcos of europe and the USA are undervalued. A figure of 100 million miles of redundant fibre optic cable through , around, and under, America has been quoted so often that I am prepared to accept it’s true. Hardly indicative of the rigorous cost controls I as a shareholder would expect to see. And while Nortel beat estimates by 20% I bet, without bothering to check, that it is only a shadow of it’s former self.
What has all this to do with RR? Probably nothing except that I like his reports, don’t necessarily agree with his theme on gold as an alternate currency, but like the fact that he has a game plan (Dow Theory). It doesn’t matter that he’s not always right, who is?
Disclaimer: I am mostly wrong, and the odd times I am right I’m so amazed that the opportunity to benefit is usually gone before I can react.
