The collision of global markets and social mood

Monday, August 11, 2014

Buzzfeed, AOL, Listicles, Pivots, Valuations & Virtuous Cycles

The S&P either made a wave 4 bottom last Thursday, or a near-term low on the way to still lower levels. Regardless, here are a few things of note as we begin the end game because we're getting closer. . .

Buzzfeed just raised $50 million at a valuation of $850 million.

Buzzfeed is a viral news website.

Just weeks ago a Washington Post editor had this to say:

When we have finally killed off most of the real, reliable journalism, when only a handful of the most legitimate news outlets remain and the rest of us are reduced to reading listicles for free as long as we endure the advertising, this is what we’re going to be left with: BuzzFeed.”

Listicles. What a perfect way to say it.

Perhaps that's why, today, according to the New York Times, "BuzzFeed will announce that its new cash infusion will be used to make several major changes, including introducing new content sections, creating an in-house incubator for new technology and potential acquisitions, and putting far more resources toward BuzzFeed Motion Pictures, its Los Angeles-based video arm.

"The goal: Try a bunch of new features, and fast."

So it's an $850 million valuation for a pivot.

It will be so cool to see them morph from viral content to original content, from stuff they found to stuff they created, from listicles to motion pictures. Remember AOL?

This is classic, end-of-cycle blue sky mania at play here.

Meanwhile Bloomberg sees the current situation as though the real fun is just beginning: "Job Market Tilts Toward Workers as U.S. Enters Virtuous Cycle."

It always looks virtuous at a peak.

Bloomberg also noted that Norway’s Wealth Fund just bought $576 Million of London's Mayfair area. This is the same fund that bought all those great sovereign bonds from the PIIGS back in 2010 and had to puke them for a $52 billion loss.

Cycles begin at lows and end at highs. The time to invest in London real estate was back in 2008-2009, not now.

Now is the time to figure out how far the S&P can fly and whether it forms a fifth wave high or an a-b-c. Either way, it looks like 1942.92 will get tested today. And I still like the volume shelf at 1965-1967 and now the gap at 1970.07.

If it's a fifth, look for 2000. If it's an a-b-c, look for a three-wave bounce higher that probably craps out around 1965-1970.


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