Quote:
Originally Posted by aceventura3
You are still in a theoretical plain. A professor at a university, who writes a book in his "garage" and it goes on to become a best seller and then he becomes a full-time writer and a filthy "rich" fat cat, employing a team including fact checkers, agent, publicist, consultants, etc., in my opinion did not play a game of "high-risk". To make this example more real, perhaps look at Stephan King.
|
But, as from the start, you are talking about the exceptions and not the rule.
You can dump all the money you want on startups, but if no one's buying anything, the money will be wasted.
You just mentioned the business cycle. Maybe we should have brought that up earlier. Right now we are in the "trough" phase, though some areas could still be considered in the contraction phase. Regardless, the trough phase is indicated by a continued recession due to falling demand and excess production capacity, but interest rates at this point are usually very low and possibly have been for a while. At this point, consumers tend to have pent-up demand that they consider fulfilling because, hey, interest is low (borrowing is cheap, saving cash isn't attractive). With this renewed spending, you tend to see stocks starting to rally (we've seen a slow but steady recovery of stocks over the past couple of years).
Now, this isn't a great recovery and so you get fits and starts, but what's at play here is spending spiking and receding. Once spending stays steady and increases once again, you're going to see stocks climb at a more steady rate as well. Without this spending, you get stuck in the trough and possibly even slide back into a contraction. This is the very real risk with the American economy right now (double-dip recession).
No amount of investor money on its own will fix this. Spending is required or nothing will happen. Spending will happen when consumers stop postponing their purchases based on their economic outlook.