The Year 2012…Boom Boom Boom

We are still on the tail end of a horrific bubble.  Anyone wearing a suit or anyone that bought a home from 2002-2006 is still talking about it.

What’s so hard for investors to understand though is the gynormous boom going on at the same time.

Sean Parker, a 12 year old billionaire that lives in his own bubble, says there are too man VC’s and too many entrepreneurs.  So precious.

Of course we have too many VC’s and entrepreneurs, but he has not seen anything yet.  We have too much cash out there, too few banks that we care to deposit it in, too many homes, too many couches and Best Buy’s and too few engineers.

In the 1980’s and 1990’s, the small banks and thrifts thrived.  Every weekend I would open my IBD and see the tiny local banks on the front pages.  They all had the best price charts and they traded 8,000 shares a day.  They were in essence private companies, trading by appointment, but they were actual public companies.   Eventually all those banks were gobbled by Wachovia, Bank of Boston and other regional banks and brokerages that were than gobbled by Citibank and Bank of America.  That process took 20-30 years.

We are threeyears into this boom of entrepreneurs and the startups that are to be gobbled up over the next 20 years.

I do not know how the stock market averages will look in twenty years and I don’t care to guess what they will look like in 3 months.  I will leave that to the suits on CNBC who still call Citibank and Bank of America cyclical businesses.

The rest of the week I will share some more links and posts on why this boom in software, mobile, engineering, entreprenuers and VC’s will continue.  Today, my favorite thoughts, of course because they align with mine, come from my friend James Altucher on the subject…’Do We Have A Bubble‘:

Definitely not. This is the dream of Internet 1.0 come true. What was that dream? That everything would be available,all the time online, cheaper, and we can communicate with anyone we wanted around the world, and of course, we could have more sex with more people than we could’ve thought possible.

What’s the proof?


These are not BS companies. Say what you want about Groupon, its the fastest growing company (in revenues) in history. Say what you want about Zynga it’s the fastest growing company (in profits) in history. Say what you want about the “old” dot-com companies: AMZN, EBAY, and lets throw GOOG (which came a little late to the game) and AAPL, they are all near all-time highs in value, revenues, and profits (which sort of suggests that even Internet 1.0 wasn’t a bubble, it was more of a way for the public to play VC. In the VC model there will be zeros and home runs. The public wasn’t used to this, so labeled it a “bust” which it wasn’t really given the number of companies from then that are at all-time highs now, 1000s% higher).

Internet companies deliver value, help the lives of consumers, and make enterprises get their own jobs done cheaper (the true cause for 9% unemployment is that the Internet created dead weight, just like the invention of machinery for agriculture ultimately ended slavery (not to compare slavery for dead weight but the only reason the south was so intent on “keeping” them was because they had no alternative of getting their fields tilled, harvested, planted, seeded, whatever).

Each generation of the Internet will eliminate deeper levels of corporate slavery. Its our duty:

–          To not wonder about boom or bust but take advantage of all the new technologies at our disposal.

–          Constantly seek to learn what they are (I am woefully behind. Already turning into an old man in my young age).

–          To free ourselves from the boundaries we thought possible.

Long live Internet 2.0

Disclosure – Long $aapl $amzn $goog $arba $sivb $azpn $tibx $intu $lpsn $nuan $erts


  1. Curtis Faith says:

    There is a bubble in Suck.

    Good internet companies? Not so much.

    James tells it like it is. Getting better at his craft these days. I’m glad you two are friends.

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  4. William Mougayar says:

    I dunno James, but no one that hasn’t been through the 2000 Internet bubble knows anything about what an Internet bubble is. 

    The Internet bubble pattern is very simple- it manifests itself in 3 shitty things that start to happen in succession: a) a lot more shitty ideas start getting funded, b) average companies get a shit load in Series B/C, c) good companies go public at mind boggling valuations that defy historical patterns and suckers buy their stock. 

    Is this good or bad? Neither. It’s plain inevitable. Excesses will happen every few years, then we learn, we adjust, we have hangovers and we start all over again. A party is a party, and it’s hard to not want to be part of a party.

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