Wry & Dry

United States

Whether or not readers consider that the business of America is business [2], it is business that is booming. And will keep on so doing. This may be difficult for readers to absorb, as they see the gyrations of the share-market as a portent of the apocalyptic end of the world.

Sure, US growth will ease as corporate profit growth eases - it's a business cycle thing. But, no mistake, low interest rates, considerable industrial capacity and now an amazingly cheap oil price will keep the wheels turning. Just look at the lowest unemployment rate (5.1%) in decades.

And the tech-boom, whilst mispriced in the share-market, is driving the west coast economy. And to a lesser extent that of Austin, Texas and Colorado.

The message to start-ups is: don’t earn a profit; you will get a better sale price based on revenue (ten times revenue) than a multiple of profit (EBITDA).

W&D has always taken with a grain of salt the stories of Chinese cash-buyers of real estate capping the markets in Melbourne and Sydney. Well perhaps a large sack of salt.

But in San Francisco (especially Palo Alto) and Seattle, Chinese investing has created stories that seem even larger. Such as the realtor (as real estate agents are termed in the US) who showed an interested Chinese buyer over five properties, each valued at over US$5m.

"Which one do you like?"

"I'll take all of them." And paid in cash.