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One of the neat things about business is that it runs in cycles. I’ve been involved in the software business since 1985 when I started my first company. Since then, I’ve seen numerous cycles with a wide range of amplitudes. I don’t try to time any of the cycles, the peaks, or the troughs; rather I just invest and work hard all the way through each of the cycles.
Given the negative sentiment across many parts of the business universe (e.g. the NY Times headline this morning Jobless Rate Hits 8.5%; 663,000 Jobs Lost), I’ve been pleasantly surprised by the Q1 performance of many of the companies I’m an investor in. Several had record quarters, most made or beat their Q1 plan (obviously the easiest plan of the year to make since it’s usually baked near the beginning of the quarter), and a couple had extraordinary growth that surprised everyone. Some struggled, but when I look at the overall distribution of behavior across our entire portfolio, it was kind of what you’d expect from a typical economic environment versus one that is either distressed or bubbly.
This morning during my daily information consumption routine, I noticed four things that stuck out.
- RIM announces strong earnings.
- Changyou has a strong IPO.
- IBM is rumored to have reached a deal to acquire Sun.
- Google is rumored to be in discussions to acquire Twitter (or not).
All of these are nice leading indicators that the exit environment for tech companies, which has been frozen for the past few quarters, is starting to thaw out. It’ll be interesting to see if this is just a warm day mid-winter or actually the beginning of spring.