Tom Evslin had a post titled “Don’t Watch The Dow!that caused me to say “right on.” In 1999, 2000, and 2001 I had a my Yahoo page up with a bunch of stocks, including a number of companies I was an investor in, as my home page. I’d hit refresh 5,321 times a day, generating plenty of CPM-based revenue for Yahoo.

When the market went down, I felt sad. When it went up I got the emotional equivalent of a sugar high. When it went back down again, I was bummed. Up: smile. Down: depressed. Up: happy. Down: cranky. And this was all before lunchtime. Maybe it was too much coffee or not enough sleep, but it got even worse when the market shifted from 1/8s to 0.01s.


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Tom Evslin had a post titled “Don’t Watch The Dow!that caused me to say “right on.” In 1999, 2000, and 2001 I had a my Yahoo page up with a bunch of stocks, including a number of companies I was an investor in, as my home page. I’d hit refresh 5,321 times a day, generating plenty of CPM-based revenue for Yahoo.

When the market went down, I felt sad. When it went up I got the emotional equivalent of a sugar high. When it went back down again, I was bummed. Up: smile. Down: depressed. Up: happy. Down: cranky. And this was all before lunchtime. Maybe it was too much coffee or not enough sleep, but it got even worse when the market shifted from 1/8s to 0.01s.

As an entrepreneur, this was all noise. As a long term VC investor, it was also all noise. Sure, the broad cycles had impact, although lots of people disagree on what they actually mean (e.g. do VCs actually benefit long-term from down cycles? Are the best companies started in recessions when everything is cheaper and more available?).

Over time, I’ve learned that none of the short-term moves in the stock market matter at all in my life. It’s occasionally entertaining to turn on CNBC and see my friend Paul Kedrosky in the octobox telling all the other people that they don’t actually understand macro-economics, but it’s no different than watching McEnroe when he’s announcing a Nadal–Federer match. It’s just sport.

Now, get back to work on something you can have an impact on!

Comment by Brett Topche
If you're talking about venture-backed companies and companies that don't need outside capital, I agree with you completely. However, there is a segment that should keep an eye on it: companies seeking capital from angels. While the most active angels are unlikely to be significantly affected by the swings in the stock market, I find a lot of smaller angel investors (particularly those who did not make their money in tech entrepreneurship) pull back when public markets take a hit. When they are less secure in the rest of their portfolios, they tend to be more risk-averse in their startup investing.
August 2011
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