Comments on: Lesson from 2002: Fund Companies in 2009!

By: Foursquare meets Right Media (or, Local meets Online Display Ad Exchanges) « IronGiving

Mon, 11 Jan 2010 23:54:46 +0000

[...] “invest aggressively during the downturn” strategy that my colleagues and I at Trinity decided to execute on a year ago will ultimately bear fruit and this expected online ad rebound may be a helpful step toward [...]

By: FourSquare meet RightMedia (or, Local meets Online Display Ad Exchanges) « IronGiving

Mon, 11 Jan 2010 23:45:41 +0000

By: Chris Yeh

Chris Yeh — Tue, 22 Sep 2009 17:44:27 +0000

Great analysis Jim! This confirms my unresearched intuition…there are four stages to the startup cycle, and the trick is knowing what to do during each phase.

We’re currently at the trough of the cycle, trending upwards, which is the best time to start and invest in companies.

As the recovery continues, the cycle will shift so that it becomes the best time for entrepreneurs to raise money.

When we approach the frenzied heights, it’s time to sell your company and raise a venture fund.

And when the crash starts, you should either buy puts, or go on a 3-month sabbatical…

By: Uday Subbarayan

Uday Subbarayan — Thu, 17 Sep 2009 19:27:51 +0000

Jim, I totally agree with you- I should be wrong in predicting 2010=2002.

As I look around here, it’s not there yet.

-Uday.

By: jimtybur

jimtybur — Thu, 17 Sep 2009 18:02:07 +0000

Uday, thx for the comment. You were quite prescient with your Feb 08 post. I’m hoping you are wrong this time though and I believe that 2010 will show more signs of sustainble growth than 2002 did. I am in total agreement that unemployment will peak next year but I am in the camp that unemployment rate is a lagging indicator of where the overall market is headed.

With that said, more detail on how to think about unemployment rate as an indicator can be found here:
http://latimesblogs.latimes.com/money_co/2009/07/wall-street-opens-this-week-less-confident-that-a-turning-point-for-the-economy-is-on-the-near-horizon-after-last-thursdays.html

and here:
http://seekingalpha.com/article/154424-is-employment-a-lagging-indicator

What do others think?

By: Uday Subbarayan

Uday Subbarayan — Thu, 17 Sep 2009 02:43:25 +0000

Jim,
The following are the reasons for my earlier comment about 2009=2001 & 2010=2002:

[1] In March of 2000, NASDAQ reached it’s (dotcom) peak and started declining. But it was only early 2001, we all felt the pain. (e.g. Cisco 8000 layoff in Apr’01)

Similarly, though we hit the financial crisis in Sep 08, we started feel the pain only this year. (e.g. Cisco 2000 layoff this year)

[2] I remember 2002 was tougher than 2001 and only 2003 was starting to feel better.

Just based on last recession, I think 2010 will be more like 2002.

This UCLA Anderson forecast says some thing along the line…
http://www.anderson.ucla.edu/x22727.xml

“expects the unemployment rate for California to rise to 11.9% in the second quarter of 2010 & ……California economy will be growing in 2011″

I don’t mean to say that this is complete/accurate and this is my observation.

In Feb 08, I made a comment and it turns out to be true!
http://uds-web.blogspot.com/2008/02/is-2009-2001.html

-Uday.