First off, there is no bubble today. Once and for all for every ‘journalist’ that calls me or any future question I get on the subject. Nyet, Nada, Nope.
We had ONE bubble in my lifetime and it was a ‘credit bubble’. We are still in it, seeing the effects of the unwinding and have a long way to go. I wrote heavily about the real-estate credit bubble from 2006-2008 as I was ground zero in Phoenix in the hottest ‘highest priced’ office that was filling up with the shmendrick brokers. Here is the defining post of my time in the building from March 2007 :
I have great office space in Phoenix. My good friend Blair grants it to me as long as I wear socks. I don’t. I WON’T!
Blair is a lender. A good one.
We share the 10th floor with Cushman Wakefield a big Commercial Broker. After a Starbucks, I have my jaunt to our shared bathroom on the floor. It has been getting more crowded. I have suggested a schedule of sorts. Not well taken.
Maybe it’s that I am prone to walk into their huge staff meetings with a pad and paper and fake like an employee. It’s the Costanza in me.
Back to the point…The bathroom indicator is flashing RED.
The bathroom is overflowing with agents. Throughout the last three years as people talked of a bubble I never got that feel. The Cushman people are pro’s and they never seemed too giddy.
Now that I am sharing the toilets with 50 new young guns, I am changing my tune.
There will be some good prices on leases in the next few years. Keep you powder dry, the leases short and your personal guarantees in your pocket. If you have to lease something now, squeeze (no pun intended) together and don’t overextend.
The internet of 1999 was a mania. What we are seeing today in web/tech is a phenomenon. People can’t value social graphs. It’s too new. Thousands of companies are starting because the opportunity to lay a claim in this phenomenon is possible.
People should be thrilled about one thing…’LIFE HAS GONE ON’. It’s different for sure and there is much pain for those stuck in their underwater homes. If you are reading the papers or watching TV you are missing the truth. Prices are moving up and too the right in everything but your home.
There are many retail stocks up 20 times on the backs of ‘tapped’ consumers. There are many oil and gas stocks up the same. Biotech and medical stocks are rocking. Software is booming. Apple and IBM are exploding with cash and growth. The media latches on to Steve Jobs not distributing the cash and thank god he laughs in their faces. Why should he trust the public with that cash. The public has proven to be imbeciles.
Most importantly for the upside of the market, no one owns stocks. There are millions of traders flipping stock with institutions in high growth names, but there are no rational conversations about the growth opportunities.
All the while, entrepreneurs are chasing dreams with little bits of angel and venture money. Companies with massive opportunity and now loads of cash are going public and dominating their verticals or mindshare. That’s not a bubble.
We the entrepreneurs believe at some level that we have the next Facebook, Linked In, Google, Pandora and our passion, fear, hunger and envy drives us. First hand let me tell you how humbling it is to have a board meeting with the investors in Zynga and WordPress – to name a couple- and explain our growth.
We are the early stages of a cycle and we need as much enthusiasm as we can get. There will be oodles of time for bubble talk in 2015.
Heads down please.