That’s what Fred Wilson, a well-known venture capitalist, has been saying lately. Wilson, who runs Union Square Ventures, a New York–based VC firm, says he sees “storm clouds” on the horizon, and he worries that we might be headed toward another disaster. “When I look at where we are right now, it reminds me so much of 1999 and frankly it scares me,” Wilson wrote recently on his blog. The 49-year-old venture capitalist’s fear is understandable. In 1996 he cofounded a New York venture fund called Flatiron Partners, which did booming business investing in Internet companies—until the bubble collapsed, wiping out a bunch of its portfolio companies. Wilson and his partner pretty much shut down Flatiron in 2001, while still helping to manage some of its portfolio companies that had survived.Undaunted, Wilson and a different partner launched Union Square Ventures in 2005, and he’s riding high once more, with smart investments in some of the hottest new companies on the Web, including Twitter, Foursquare, and Zynga. Nonetheless, Wilson has grown nervous in recent months. He says too many investors are pouring money into Web-based startups, driving valuations to ridiculous heights. In days gone by, the rule of thumb was that a company with two or three employees would be valued at $5 million or less. But “today in the early-stage market we’re seeing two- and three-person teams that are getting $30 million, $40 million, $50 million valuations, and I think that’s not right,” Wilson said onstage at a Web 2.0 conference in San Francisco last month. (more)
Saturday, December 4, 2010
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The average discount for bank-owned real estate, residences in default or those scheduled for auction rose from 29 percent a year earlier, RealtyTrac said in a report today. A quarter of all U.S. transactions involved those types of homes, according to the Irvine, California-based data seller.
Sales of foreclosure properties plunged 31 percent as the end of a buyer tax credit reduced purchases overall, RealtyTrac said. The decline came before loan servicers including Bank of America Corp. and JPMorgan Chase & Co. halted some home seizures amid claims that employees processed thousands of documents without verifying them, a practice known as robo-signing. (more)
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While staying focused on your best long-term ideas, it also helps to boost your portfolio by looking for stocks with a chance for quick moderate gains. And in the tech sector, we've seen all kinds of headline-induced winners in the past six months, thanks to M&A activity, robust quarterly results and other catalysts. [Catalyst Investing Secrets Revealed]
Here are three more names that could be quick risers during the next few months.
1. Motorola (NYSE: MOT)
This former tech stalwart has been on the mend after a disastrous few years. This $25 stock in 2007 fell below $5 in early 2009, but is now back up above $7.50. Yet by January, shares could hit $9 or even $10 -- good for +15% to +30% gains. Here's why…
More than a year ago, Motorola announced that it would cut itself into two pieces, with one focusing on enterprise products and the other focused on mobility products, which I discussed here. (more)
Caterpillar Inc. (NYSE: CAT) manufactures construction and mining equipment, diesel and natural gas engines, and industrial gas turbines. This blue chip has been in a bull market since the stock market bottomed in March 2009. The advance from its bear market low at $22 has been very orderly — defined by the stock’s ability to stay above its 200-day moving average and bullish support line.
In September, CAT broke from a triple-top and began a new march north. Any further weakness could be used as a buying opportunity. S&P has a “four-star buy” rating on CAT with a 12-month price target of $95, which matches our technical target. (more)
Remember that crazy dotcom bubble in the late 1990s and the huge bust that followed? It looks like we’re about to sit through the same movie all over again.
“The jobs number was surprising, and I’m wondering if next month we get a revision. I mean retail losses in November? You have to take it with a grain of salt,” said Marc Pado, U.S. market strategist at Cantor Fitzgerald, of the Labor Department’s report.
The report showed payrolls growth of 39,000 last month, far fewer than the 155,000 gain predicted by analysts surveyed by MarketWatch. Read more on jobs report.
The major indexes ended higher for the week, with the Nasdaq Composite Index nearing a three-year high, thanks largely to rallies on Wednesday and Thursday.
On Friday, the indexes meandered mostly lower most of the session before turning higher late in the day. (more)