Mark Anderson: Five harbingers of improvement

Technology analyst Mark Anderson sees light at the end of the economic tunnel. In this week’s edition of Anderson’s Strategic News Service newsletter, Anderson identifies five indicators:

  1. PC Operating System sales.
  2. Ad sales.
  3. Government Spending Is Way Up.
  4. Asia Launches the Broadband Revolution.
  5. U.S. interest rates remain low, and headed lower, while housing starts and car sales remain robust.

Let’s hope Mark’s right and those are indeed positive leading indicators! Frankly, the only one that makes strong sense to me is increased government spending.

Meanwhile, speaking of indicators of economic activity, Ernst & Young and VentureOne report that venture investment in the third quarter of 2002 was at the lowest level in four years.

The number of venture capital transactions
has fallen to levels commensurate with 1996-1997, although at $6.7 million,
the median amount of capital invested in each deal is still higher. Compared
to last year at this time, investment is at roughly half the volume and deal
flow has declined by a third.

I think venture investment activity is a lagging indicator — as the investment pace only begins to pick up when VC’s think the exit options for their companies are strong and viable. Unfortunately, we continue to be in the worst market for new IPO’s since the mid-1970’s.

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