The year 2013 is not in the books, but Stocktoberfest has me thinking about 2014. So does this kid:
In 2010 I was in Paris, sitting at the Four Seasons and I ordered a club sandwich. It was $50 (insert French joke here). I tweeted at the time that we were headed for a world of $50 Smartphones and $50 Sandwiches. I don’t know how to look that up, but I remember getting the ‘Quote of the Day’ from Michael Parekh.
At Stocktoberfest, we were treated to an awesome presentation by Andy Kessler entitled ‘Investing in the Fog’. Andy believes I was way off on the $50 Smartphone…he feels it is more like $35! I think Andy is right.
As for sandwiches…as we speak, the Chinese and the Arabs are sprinkling gold dust on them for shits and giggles. The Stocktwits50 is full of food and beverage companies right now including Whole Foods, Chipotles, Starbucks, BoulderBrands ($BDBD – gluten-free foods) and United Foods ($UNFI). All premium priced brands.
Chinese women who hate the taste of coffee are holding their ‘green tea’ noses to be seen in the windows of their local Starbucks. Paying $50 for a Chipotle’s Burrito can’t be far off.
The inevitabilty of the $35 Smartphone will set the stage for super conglomerate global web and technology companies. Eventually we will be able to measure the ‘social leverage’ in these new networks that we have been building. In the meantime, it is a game of chicken as the public markets bid up prices in this low interest rate environment. As Fred points out, the Genie has gotten out of the bottle with companies like AirBNB and I would say the mobile and social web has put the ‘Genie AND The Bottle’ in more hands than ever.
The cash rich Nasdaq and Global Technology companies will continue to invest in talent and acquisitions. I just believe the deal size will get way bigger. I also believe that interest rates, save spikes, will stay low. A disappearing United States middle class has been underway and that should keep a lid on interest rates. Don’t shoot the messenger.
Apple will eventually get bored with sub $1 billion acquisitions. Google is not afraid of the big acquisition.
If Apple paid $25 billion for Netflix, it would be insane by all financial metrics of valuation, but cost just two quarters of Apple’s cash flow. Even if Apple is not interested, Google might think they are…
Exciting times to invest, trade and speculate.