My theory is similar. We are in a "rise-all-boats" bull run thanks to the injection of cash into the economy from the Fed. The few "Buffet-like" value investment managers are saying there isn't much margin-of-safety in valuations any more. Also, other than tech, other sectors of the economy are "easy" to price. We pretty much know the growth of a utility company, real estate company, etc is going to be. They can only grow so fast, and the market guess within certain tolerances what it will be.
On the other hand, tech is one of those fairy land sectors that is not priced on any reasonable metric (profits), but instead on hopes and dreams. Until all tech becomes priced based on profits (like Apple, IBM, Google, etc) it will continue to see large investments seeking outlandish returns. Right now it's an area where getting market share from others can happen quickly.
It's pretty hard to grab market share from a utility (usually regulated monopoly) or a rent seeker (you need to buy the asset to rent it out yourself). Same goes for other sectors, only so many cars can be bought every year for example.
Snagging eyeballs can happen quickly, can be fleeting (myspace) or more long-lasting (facebook). Hence the WhatsApp stuff (OMG, so many eyeballs there, just like facebook!!!).
Comments
My theory is similar. We are in a "rise-all-boats" bull run thanks to the injection of cash into the economy from the Fed. The few "Buffet-like" value investment managers are saying there isn't much margin-of-safety in valuations any more. Also, other than tech, other sectors of the economy are "easy" to price. We pretty much know the growth of a utility company, real estate company, etc is going to be. They can only grow so fast, and the market guess within certain tolerances what it will be.
On the other hand, tech is one of those fairy land sectors that is not priced on any reasonable metric (profits), but instead on hopes and dreams. Until all tech becomes priced based on profits (like Apple, IBM, Google, etc) it will continue to see large investments seeking outlandish returns. Right now it's an area where getting market share from others can happen quickly.
It's pretty hard to grab market share from a utility (usually regulated monopoly) or a rent seeker (you need to buy the asset to rent it out yourself). Same goes for other sectors, only so many cars can be bought every year for example.
Snagging eyeballs can happen quickly, can be fleeting (myspace) or more long-lasting (facebook). Hence the WhatsApp stuff (OMG, so many eyeballs there, just like facebook!!!).
"or a rent seeker (you need to buy the asset to rent it out yourself)"
"Rent seeking" is a different thing than "renting out access to an asset".
http://en.wikipedia.org/wiki/Rent-seeking