The point isn't to avoid all the dips, just the most punishing collapses. The bear market of the past year or so has sent a lot of great companies reeling. But it's important not to make sweeping generalizations about the destructive power of the New Economy out of what is really just a normal example of how U.S. capitalism works out the demand-supply imbalances generated by an overabundance of cheap capital. It's certainly far too early to say that the New Economy is peculiarly hostile to a company maintaining a long-term competitive advantage. But that's the way capitalism has always worked.
Excess profits attract competitors.
That's very different from saying that in the future EMC won't dominate the storage market because its installed base, its massive and aggressive sales force and its economies of scale are no longer important competitive advantages. I haven't seen anything during the bear market in technology that suggests that some other company has been able to negate these advantages. Our feeling that competitive advantage doesn't last very long anymore is attributable, I think, to recent mistakes in deciding that some relatively untested companies had managed to achieve a lasting edge over their competitors. I'd argue that Amazon has failed to do that not because some character of the New Economy attacked and eroded that competitive advantage, but because that competitive advantage was a lot more potential than actual. And in the testing, Amazon has, so far, failed to demonstrate that it has achieved any competitive advantage over well-run traditional retailers.