Okay, now it’s ’99.
Am I kidding? I don’t know. It feels that way and yet it doesn’t. Stocks like Facebook and Google are going bananas but they are insanely profitable companies with billions and billions in real business. Priceline isn’t Webvan. Salesforce.com isn’t Commerce One.
Google just ripped through $1000 this morning, as I thought it would and screamed from your TV screen a few hundred times this year. Now what? Stocks breaking $100 per share tend to keep going – the reason for this is that institutions refuse to sell, they wouldn’t want to buy it back above $100 if they own it under. Stupid, but true fact. No one admits it, we are supposed to be professionals.
Why should the $1000 barrier be any different than the $100 barrier? It won’t be – just look at Priceline since becoming the first S&P 500 stock ever to break the four digit mark in share price, it’s rolling on the river.
In the meantime, you can pretty much IPO any sandwich chain (Potbelly) or gourmet supermarket (Sprouts) or cloud software company (FireEye) you want, odds are it’ll open at a double. Renaissance Capital is launching an ETF that will buy just-IPO’d new issues and hold them for two years. You should see the backtest on a strategy like that for the last couple of years, Mamma Mia!
Twitter’s going to get a $20 billion valuation out of the gates, barring an Israeli airstrike on Iran or an errant remark from a drunk FOMC voting member.
Everyone’s getting hip to the game. Buy The Fucking Dip is now part of our everyday vernacular, only the hipsters were tweeting it in 2010. It has an Urban Dictionary entry and a trader TV network named for it, so it’s truly arrived.
So far, the Rocket Fuel Hypothesis looks correct, but it seems too easy. Are we pulling forward the entire Santa Claus rally into October? Too much, too soon?