Bubbles! Bubbles! Bubbles!

That fish from Finding Nemo cracks me up. You know, the one named Bubbles who kept chasing all the bubbles in the fish tank every time it appeared “out of nowhere”.  He went absolutely berserk for those bubbles. And it made me wonder about financial and stock market related bubbles. Housing bubbles; commodities bubbles; financial bubbles; tech bubbles. All of the reactions that people had for skyrocketing bubbles were ever so similar to this fishes’ reaction.

The amounting anticipation as you’re wondering when they will spout next. Almost, unlike, old faithful who explodes on cue, market bubbles tend to erupt unexpectedly not because of anything more than pressure. The short term nature of the bubbles is like the short term swings in the financial markets. And finally, when it bursts the seal, any fish waiting there is trying to catch just about any point of the rise up, only to realize that after all of the bubbles have vaporized and dissipated, you’re left holding nothing but perhaps a little extra gas and a memory of what seemed like an illusion.

So many tech companies got lost in the bubble dissipation back in the early 2000s, and those who survived, only did because they picked a niche that would luckily propel them into the next evolving step of worldwide internet technology. Yet, what makes them any different than the thousands of companies that went bankrupt was nothing more than a few extra pennies on the balance sheet and the luck of picking the right alignment to weather the storm. After the bubble burst, all online companies were viewed upon as shady, and they all had to find a way to claw back into the positive view of the public eye. Companies like Big Word who at one point thought that they, too, would weather the storm are only now picking up the pieces and starting again.

But this time, companies like Big Word have a better chance at succeeding in this new app tech bubble because: (1) people are more familiar with online and mobile technology (2) there are a few big corporations unifying and consolidating most apps and technology that are being produced. In other words, consumers are not as risk aversed as the previous tech bubble and there is no new technology being introduced at this point that could change peoples’ perception. Furthermore, the availability of materials is easily attainable and there are very few barriers to entry into this market.

So, even though domestic and European debt issues may cloud the near term future of our overall stock market, app-space company valuations should smooth out closer to perfect competition rules rather than ending in obliteration. So, maybe just this one time, its okay to be one of those goofy fish trying to catch your bubble.

Thanks for listening to just another guy trying to tell his story…

Souttz, SK!

 

 

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