Thursday, May 19, 2011

Risk on!

The correlation among all asset classes remains very high. Last week stocks slid as the world began to fear that oil, gold and silver were all in bubblicious territory. Now, oil is back over $100, LinkedIn is public (more on that below) and the "risk on" trade is back in play.

The jobless claims numbers were a little better than expected but remains elevated north of 400,000.

On a related subject it's a tough time to be a college grad.

" Employment rates for new college graduates have fallen sharply in the last two years, as have starting salaries for those who can find work. What’s more, only half of the jobs landed by these new graduates even require a college degree.

The median starting salary for students graduating from four-year colleges in 2009 and 2010 was $27,000, down from $30,000 for those who entered the work force in 2006 to 2008, according to a study released on Wednesday.

Among the members of the class of 2010, just 56 percent had held at least one job by this spring, when the survey was conducted. That compares with 90 percent of graduates from the classes of 2006 and 2007."

LinkedIn will be the talk of the markets today and call me an old stick in the mud for not understanding why this business is valuable. A bunch of unemployed people emailing each other begging to get an interview with the one person in their circle of connections that still has a job? Why, yes, of course that's worth $4 billion.

Someone pointed out that to grow into a PE of 70x, LinkedIn will need to grow their best ever earnings by 380%!! I know many in the tech world are arguing that this isn't a sign of a bubble in tech but frankly they sound like a bunch of ostriches with their heads in the sand.

Quote of the day:

"Tokyo Electric in recent days has acknowledged that damage at the plant was worse than previously thought, with fuel rods most likely melting completely at Reactors 1, 2 and 3 in the early hours of the crisis, raising the danger of more catastrophic releases of radioactive materials."

Nice to know this two months after the event.

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