I no longer have my copy of Benjamin Graham's "The Intelligent Investor," but at one point he presciently writes, "An asshole is someone who thinks the paradigms of investing can permanently shift." Or something.
The point is, The New York Times' recent story on the "not-so-exclusive" club of billion-dollar startups sounds like a case study in short-sighted investor euphoria.
As Quentin Hardy writes, "Silicon Valley entrepreneurs contend that the price spiral is not a sign of another tech bubble. The high prices are reasonable, they say, because innovations like smartphones and cloud computing will remake a technology industry that is already worth hundreds of billions of dollars."
To which I say: the term "reasonable price spiral" is an oxymoron. The tech bubble will continue to be worth billions of course -- but there will be very clear winners and losers. The pool of "look-alike" companies, most of which deal in cloud/enterprise activities, will separate itself. Every copy-cat firm hoping to make a quick billion will lose innovation steam, or people will just realize there's no point investing in a company with no revenue stream (heya, Pinterest!).
Better hit the IPO and cash out quick, guys -- what goes up in the Valley will come down on the Street.
The point is, The New York Times' recent story on the "not-so-exclusive" club of billion-dollar startups sounds like a case study in short-sighted investor euphoria.
As Quentin Hardy writes, "Silicon Valley entrepreneurs contend that the price spiral is not a sign of another tech bubble. The high prices are reasonable, they say, because innovations like smartphones and cloud computing will remake a technology industry that is already worth hundreds of billions of dollars."
To which I say: the term "reasonable price spiral" is an oxymoron. The tech bubble will continue to be worth billions of course -- but there will be very clear winners and losers. The pool of "look-alike" companies, most of which deal in cloud/enterprise activities, will separate itself. Every copy-cat firm hoping to make a quick billion will lose innovation steam, or people will just realize there's no point investing in a company with no revenue stream (heya, Pinterest!).
Better hit the IPO and cash out quick, guys -- what goes up in the Valley will come down on the Street.
 |
| Except you, Aaron Levie...you're cool. |
No comments:
Post a Comment