Earnings season is here, and it’s clear that there remains a lot of bad news in the pipeline. This is not good, but the silver lining in all of this is that 2009 will mark the delineation and divergence between businesses who
- have used cheap credit, excess consumption (relative to savings and earnings) and government subsidies and operate in mature/declining industries
and
- those who are growing and have an opportunity to exploit the retrenchment of the companies above.
You see it everywhere: Alcoa bombed last night and announced larger than expected losses, today we learn that SONY might lose $1B, their first loss in 14 years. SONY has coasted for years and lost major opportunities to competitors like Apple (in digital music) and Nintendo (gaming). This is not say either companies are doomed, but as they need to scale back their businesses, it creates a lot of opportunities for new players to attack. This is exactly why some VCs are setting up new funds.
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