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But markets are good at solving that kind of problem.I wouldn't be surprised if the market ultimately did a better job than VCs do now.
But most of the winners will only indirectly be Internet companies; for every Google there will be ten Jet Blues.3. The general argument is that new forms of communication always do.
They happen rarely (till industrial times there were just speech, writing, and printing), but when they do, they always cause a big splash.
Recognizing an important trend turns out to be easier than figuring out how to profit from it.
The mistake investors always seem to make is to take the trend too literally. In fact most of the money to be made from big trends is made indirectly.
Now anything that became fashionable during the Bubble is ipso facto unfashionable.
But that's a mistake—an even bigger mistake than believing what everyone was saying in 1999.
The stock of a company that doesn't yet have earnings is worth something.
It may take a while for the market to learn how to value such companies, just as it had to learn to value common stocks in the early 20th century.
By the end of the Bubble, companies going public with no earnings were being derided as "concept stocks," as if it were inherently stupid to invest in them.
But investing in concepts isn't stupid; it's what VCs do, and the best of them are far from stupid.