The Next New New Thing

As nearly everyone knows, the last few months have generally been less kind to the investor than the previous two dozen or so months. For those who overinvested in the so-called "TMT" world, or Technology/Media/Telecom, that is a gross understatement. And contrary to the belief of one particularly misguided but well-read CEO, quoting Greek dramatists such as Aeschylus ("the reward of suffering is experience") doesn't ease the pain.

Which brings up a point that seems obvious to reasonably regular readers of this space: If something can't go on forever, it won't. Not all start-ups are worth $7 billion in their first three months of existence; putting an "e" in front of a corporate moniker does not a guarantee a future with your own private island; and the reality of what it really takes to justify price/earnings multiples of 100 or more must be depressing to people who have only recently taken the time to consider the implication.

Here's our new favorite quote from a friend in the TMT world: "Profitability has gone from a curse word to a code word to a survival word ... and we have a month to get there since the money dried up overnight."

Which brings up our really big thought. In the past few months, we have seen a number of articles proposing that the economy might not really be affected by a serious downturn in the stock market or a collapse in the bleeding-edge world. Let us state this simply: That is so wrong that our hands shake with intellectual vehemence as we type this. Fortunately, we recently came across several versions of a chart that illustrate this point so well, we no longer need another 2,500 words of analysis. ...