The stock market is taking a beating. Yesterday alone, the NYSE lost 357 points. That’s more than two percent of it’s entire worth. One investor warns tech companies and stockholders this could only be the beginning.
Venture capital investor Bill Gurley went on a tweet campaign warning tech companies worth over a billion dollars to prepare for hard economic times ahead. Yesterday, Gurley tweeted about the nosedive tech stocks have taken in the last several weeks. Some have lost a quarter or even half of what their numbers were just a few months ago. It’s not just American stocks. Gurley warned global stocks are compressing. Look at China, the world’s second biggest economy. Gurley goes on to say we’re nearing the end of the cycle where growth is more important than profitability. And this is at a time when many, like Uber, put growth ahead of profits, even at the expense of profits. Gurley didn’t just start sounding the alarm. Last year, he warned of tech bubbles bursting all over the world. He even predicted 2015 would be the year of ‘dead unicorns’. It’s not like this hasn’t happened before. In 2008, an investment firm called Sequoia released a slideshow called R.I.P. Good Times. Their slideshow foretold a coming crisis. Look at what happened later that year.
We at Computer Geeks are not doom and gloom profits by any means. But when you hear predictions like Gurley’s and listen to other well respected financial experts say prepare for the worst, we may want to take such warnings seriously. When we see China’s economy in free fall and Greece President Alexis Tsipris resign over his country’s financial woes, we might want to take heed. Maybe nothing will come of this. Maybe these predictions will turn out wrong. In fact, I hope they do. But isn’t it better to be forewarned before something happens than be caught uninformed and unprepared?