Not yet. No, we don't have to worry just yet.
I am talking about the coming onslaught of initial public offerings and how it will no doubt cause the short-term pause everyone is expecting in this market.
It didn't start yesterday with Canada Goose (GOOS) , even though lots of people were critical of my decision to embrace the deal. I did so because there is such scarcity of growth in apparel that it's kind of like what happened when Michael Kors (KORS) came public a few years ago. It was a must-own, because there were so few accessory investments worth making. Darn thing went from $23 to $97 before it hit the wall, and it's been downhill ever since. But what a ride. What a worthwhile ride to take. If you decided to avoid it because the stock ultimately went down to $37, then you forget that $97 was, indeed, attainable. Very few can get out at the top. But getting out at $87 or $77 would have been just fine, thank you.
And it won't start with Mulesoft (MULE) , which looks like a terrific company that truly helps clients like New Relic figure out if they have the right plumbing to be helpful to clients who are desperate to find out if their omnichannel is working. If Mulesoft makes applications work that tell you whether there is a sale at Wawa -- the local convenience store where I grew up -- count me in!
That company seems like it is totally worthwhile and it's got a good chance for a nice run.
But I keep thinking back to March 2014, when we got into the fever pitch. That was that era when we were seeing companies come public at a 9x or 10x enterprise to sales valuation and the market loved it ... until it didn't.
I am talking about that one spate when Amber Road (AMBR) , A10 Networks (ATEN) , Q2 Holdings (QTWO) , BorderFree (BRDR) , Paylocity (PCTY) and King Digital (KING) among a host of others came public, all will sliver deals, all popping until we were so sated with new stocks that there wasn't enough money out there to support them.
Lots of people ask me "what kills a bull." I always say that what kills the bull is supply, because markets are about supply and demand and when too much merchandise, or supply, is pumped out and it overwhelms demand, then the bull takes a header.
Do you know that this might be my 20th IPO cycle in 37 years when I see the supply coming? It looks to me as if we are white water rafting together and we hear the falls ahead, but we are having such a good time we say to ourselves: "why stop"?
Well, I will tell you why. The bottom of the waterfall is too far from here. Nobody makes it alive.
So forgive me, but if this pace that I keep hearing about of new deals keeps up, I am going to have to say that you have to stop having such a good time rafting unless you have wings on your raft and, sadly, I have never seen one that has.