I don’t really have an opinion on the direction of the market, but in October 2008, the experts were calling for the end of Silicon Valley.
I have been telling any of the CEO’s that will listen to me, to THINK about how we turn this panic into an opportunity. We all have weak investments and weak CEO’s, but a blast email on October 7th is absurd. Anyways, I am poor and they are rich, so that’s that. So while the rest of the world panics, you can panic too, or you can take a few steps back and remember how fortunate you are to be reading this blog, because if you are, you are ‘Too Small to Fail.’ So what do I mean by that?
I can’t fire myself. I am nimble and lean and have a plan. I see this panic and I want to think about the afterbirth of it. Panic’s end. If you are smart and a little lucky, you will survive in good stead and historically, great things happen. If you don’t believe me, take a look at this chart from my friends at Blackstar (I have an investment in their fund). We are in the worst 12 month rolling period of returns since 1937. If you look closely…what follows is investing NIRVANA (click below to enlarge)
Nirvana has indeed unfolded. The S&P is up 100 percent off the lows. In Silicon Valley…Zillow and LinkedIn have filed for an IPO, $FBOOK is mulling a RE-IPO, angel investments I made with no SUPER angels in 2008 have raised uprounds of $100′s of millions and $ZIP and $TSLA don’t need to think about profiits with their coffers full of IPO money.
In hindsight, I made a major market call. I am Elaine Garzarelli and Noriel Roubini at the same time.
If I were to make a recommendation to my readers today it would be to remember my all-time favorite post from October 2008 which I pulled the paragraphs above titled ‘Too Small to Fail‘. It’s my favorite because in hindsight it was dead on and also because it inspired a post by Seth Godin (‘bucket list’ stuff for me).
Money is flowing and no one thought it could be this loose in 2011. The banks have not helped a bit and are sitting on what I believe is more ‘shadow’ inventory than at any point since the financial crisis began. The banks suck ass.
Entrepreneurs pulled Silicon Valley back from the brink. Now the Venture Capitalists are piling on. JP Shmorgan is finally puking up risk capital as well with their pals at Goldman’s Sack. The entrepreneurs are doing the right thing. They are taking in the lazy money and taking hard earned money ‘off’ the table for themselves. They are not buying 50 cars and building dungeons to do blow and have parties (or I am not getting invited…). They are investing as quickly as they can in 20 startups.
No one knows how this will end because this bull market is already different than any other bull market. New leaders, new sectors, some new wealth and way more people on the sidelines and even hurting than ever. A new cocktail of capital and risk expectations.
In a full circle to October 2008, Seth Godin is now inspiring me for this post with his two weekend posts ‘The Realization is Now‘ and ‘The Opportunity is Here’. Read them. Anything is possible today. Just this week I was invited back to my school (Thunderbird) by the super cool President Angel Cabrera who loves the power of Twitter and Stocktwits and New Media. Trust me, it is a big thrill to get asked back to your Graduate School to chat about what they think is success. You go with it :) .
With all the recent hoopla and attention though, I am using this weekend to revisit my posts from late 2008 and early 2009. I am thinking that ‘Too Small to Fail’ is more important than ever and JP Shmorgan, Goldman’s Sack and Sequoia Capital are about to send a powerpoint to it’s CEO’s and inside investors saying ‘The Bull Market is Here to Stay’.
Watch your back.
PS – Interesting that I wrote without noticing that Arrington and Fred Wilson both are chatting about the term ‘bubble’ today as well