1.Chinese Venture Funding is 15x 2013 Levels….2017 Saw Almost Equal Funding to U.S.
Silicon Valley Powered American Tech Dominance—Now It Has a Challenger
An exclusive WSJ analysis shows how venture-capital investment from Asia is skyrocketing, threatening to shift power over innovation
ByPhred Dvorak andYasufumi Saito
Silicon Valley, long the undisputed king of venture capital, is now sharing its throne with Asia.
A decade ago, nearly three-quarters of the world’s financing of innovative, tech-heavy startups and young companies took place in the U.S., with American investors plowing money into mostly U.S.-based venture firms.
Now, a surge of new money—mostly from China—has helped drive funding totals into the stratosphere and has transformed the venture landscape, according to an exclusive Wall Street Journal analysis of venture funding data.
Asian investors directed nearly as much money into startups last year as American investors did—40% of the record $154 billion in global venture financing versus 44%, the Journal’s analysis of data from private markets data tracker Dow Jones VentureSource found. Asia’s share is up from less than 5% just 10 years ago.
Speculators are now positioned net long Vix futures to a near record extent (orange line). In the past decade, that has reliably coincided with at least a near term top in volatility (blue line; from Movement Capital).
1.Another Reminder of How Tough it is to Time Markets…..Final 12 Months of Bull Account for One-Fifth of Gains.
Behind it all are facts of investing known well by anyone who sold after Brexit, the U.S. election, or five market corrections since 2009 that look just like this. One, it’s hard to see the end of things. Two, a lot of money is made at the top. Three, you miss any payoff in equities right now at grave risk to your career.
“It can be 6 or 8 percent costly, or even 10 percent costly” if you bail too soon, said John Augustine, chief investment officer for Huntington Private Bank in Columbus, Ohio, in an interview at Bloomberg’s New York headquarters. “That can mean a lot to folks in a 2 percent nominal world.”
It can actually mean more. A study by Bank of America Corp. on market peaks since 1937 shows that being uninvested in the last year of an advance meant foregoing one-fifth of the rally’s overall return. While every episode is different, that math translates into additional 470 points in the S&P 500, if the bull market goes on for another year.
Crash Course in Market Timing Shows Cost of Being Wrong at Tops