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Friday's Outlook: Stick a Fork in Mr. Market

As usual, Mr Market is irrational (read overdone), and the more irrational the more myopic the street gets. This too shall pass and as the fog lifts, the market will slowly climb out of this morass and I'ld like to see all those analysts eat their recessionary and bear market hats. Its crisis like this in which fortunes are made and lost.

Slow-Playing LoopNet For Now

I'm sure someone once said that ebay would be toast in a couple years.

The fact of the matter is that commercial real estate is different than residential RE in that the comm'l RE buyers and sellers are mostly professional who have a high level knowledge of what they're looking for and negotiating transactions, and the brokers are far less important in the process. An internet marketplace for comm'l RE is as natural a niche as Amazon in the book business. The above posters are probably luddites pooh poohing technology that they perceive to be threatening their job.

LOOP is stepping up and competing with CoStar, and if you compare their business models its like GOOG vs. AOL ten years ago.

Chris raises very good points and some will prove to be true like you can't maintain a ridiculous growth rate. But others are misleading like higher churn rate. When you raise prices, you're definitely going to lose more customers but if total revenues increase significantly and the churn rate increases marginally that's a trade-off any businessman will accept. The bottom line is hard numbers; much of the above data is out of context without bottom line hard numbers which we'll soon see. In the meantime, the stock at current levels is a good but risky buy mainly due to whether the economy goes into recession and not the residential fallout. Right now the odds are plus or minus 50% depending on the crystal ball reader.

Stay tuned and don't panic. Remember the greatest fortunes are won during times of crisis when people do irrational things enmasse.

Bill Gross: U.S. Already in Recession

Outperforming the market during the 2nd half of this year is no great feat; although the market's been on a roller coaster since August its just now re-approaching the levels attained during July. Gross' comments and the article is just another example of the media distorting the market and more grist for the fearful and greedy.

Bill Gross: Expect Fed Funds To Hit 3.5%

We are going into the second leg of the most robust economic expansion in history due to the convergence of free trade (product, service & capital), the internet and rise of democratic power. There are of course imbalances due to overextension (energy and the sub-prime mess) which are in the process of correction but it is just the gears grinding as the global economy shifts into second gear.

The Fed may set target rates for various funds but its the global capital markets that set the real rates. In this scenario, the Fed's role really reverts to its classic role, the lender of last resort rather than setting proactive economic policy. In this capacity, it performed ideally in the recent credit crunch.

Now the credit markets are de-leveraging and unwinding in orderly fashion. Its sort of like when a football has been fumbled and the players on the field lose their poise and go crazy trying to recover the ball; and the end result is always the same: grown men throwing themselves on, over or under a pile of bodies hoping to save the day. Eventually, the referees after repeated attempts by blowing whistles, throwing flags and shoving these huge guys to one side or another finally gets everyone to stay put and slowly one by one bodies come away from the pile. Eventually the ref finds out who has the ball and signals who has possesion and the game gets back on track and everyone regains their poise. This is what's happening now with behemoths like Merrill and Citi emerging from the pile (they fumbled the ball and are coming up empty) indicating huge losses and of course heads rolling. There'll be a few more while the indicators (GDP growth, employment, inflation, etc.) will signal that the overall expansion is still on. Everyone will regain their poise, the doom and gloomers will go back in the closet and the capital markets will rise again and second leg of this expansion will drive the indices into new territory.

As the old Neill Young song goes "don't let the sound of the wheels drive you crazy".

Trident Plunges On Competition From Low End TV Makers

That was one horrific plunge reflecting a horrific forecast in revenue for the next quarter.

It challenges the imagination to contemplate a sequential 20% overall drop in revenue due to low-end product competition in the midst of favorable seasonal trade winds.