For just over a year now, I’ve been telling people that we were likely starting to enter an app/tablet/smartphone/cloud-fueled new tech bubble. I told my viewers on Happy Hour repeatedly that Facebook would be worth more than a hundred billion dollars someday.
I figured we’d be seeing tons of content/cloud/app companies like Chinese social network company, RenRen and LinkedIn would be able to tap the capital markets, and they’d get huge valuations and raise big money and that would start a virtuous (for now) cycle of more companies that have anything to do with apps/tablets/smartphones/theCloud would likewise raise big capital at big valuations in both the private and the public markets. All of which would combine such that after a year or two all that money would start to float around the app/tablet/smartphone/cloud supply and demand chain and after another year or two more companies raise more money because everybody thinks it’s all sustainable forever. And of course, a large part of predicting a building of this now burgeoning app/tablet/smartphone/cloud bubble has been and is still layered upon the seeds planted by the Fed’s been pursuing never-before-seen policies of extreme easy money and the Republican/Democrats are creating ever new targeted tax tricks and explicit welfare subsidies for corporate America.
Let’s remind ourselves of some past bubbles that we’ve seen come and go. Let’s start with a quick TelEnomic history as yours truly, for many years, was known as The TelEconomist, on Wall Street and on TV because of my analysis into and out of the Great Telecom/Tech/DotCom Bubble. The Great Telecom/Tech/DotCom started inflating in 1996 or so when a few select telecoms and internet companies like Metromedia and Netscape went public raising big money to huge valuations and huge interest all of which eventually grew even bigger as their suppliers and customers started going public and the money floated all around and venture capitalists kept throwing more and more money at any company with any combination of the words Communications/Tech/Dotcom. Meanwhile the Fed had been pursuing what at the time were historically extremely easy money policies and the Republican/Democrat Regime had been cutting tax rates and creating targeted tax tricks and explicit welfare subsidies for corporate America.
After seeing LinkedIn come out with its valuation of $8 billion, it’s certainly likely that Facebook will indeed eventually come public with the $100 billion valuation that I’ve been talking about since Microsoft first snuck in a big investment at Facebook with a $15 billion valuation last year.
Heck, I read an article today that took my $100 billion price target for Facebook a bit further and predicted that Facebook — not Apple and not Google and certainly not Exxon or GE — would be the first trillion dollar company. And why not? If we’re truly headed into a bubble and Facebook’s truly got more information about almost every affluent and tech-savvy person in this country and much of the rest of the world and Facebook starts leveraging their incredible traffic trends to create billion dollar revenue lines…it’s not impossible. Perhaps these three companies will be the first three trillion dollar companies.
We’ve got the playbook, the timeline and the setup. I can only guarantee you that I’ll remain focused and disciplined and that I’ll be doing everything I can to find us the best stocks and the best options to maximize our profits along the way.