DO STOCKS HAVE MORE ROOM TO RUN?
Do stocks have more room to run?
By Thomas Heath, Published: January 19, 2014
TIGER 21, the social club for wealthy investors that arrived in Washington three years ago, reports that members were surprised at the stock market’s 2013 success, but are apprehensive looking ahead toward 2014.
Members, who pay $30,000 a year in dues to share ideas and the skinny on money management, believe public equities are still the best bet this year, with 27 percent sticking with stocks as their top investment pick, according to entrepreneur/investor Cal Simmons, who runs the local chapters.
The other asset classes that members are optimistic about this year are: private equity (22 percent), real estate (18 percent) and hedge funds (11 percent).
The Washington area has two chapters, including one in the District and another that began meeting at the Tower Club in Tysons Corner last fall.
“I wouldn’t say there is consensus,” Simmons said. “Most people are cautiously optimistic that we will have a good year, but certainly not as strong a year in the stock market as we had last year.”
Most meetings include a guest speaker, and Simmons said members have asked for more guests from the world of early-stage private equity this year. In the past, the demand was for stock pickers.
“Members see more upside in private equity, especially where they have the opportunity to get involved,” Simmons said. “It’s not unusual for one of our members to write a $50,000 or $200,000 check to an early-stage start-up and take a seat on the board. Most have been operators, so they feel they can help the company with their expertise and have a better bet on the upside.”
Simmons said the hot areas for Washington investment currently run the gamut from biotech to software to services.
“I see a lot of positive deal flow in the D.C. community, and our members have been very active,” he said.
Hip hop for breakfast
Carlyle Group’s David M. Rubenstein sported a pair of Beats by Dr. Dre headphones on the set of set of CNBC’s “Squawkbox” last week. In September 2013, Carlyle invested $500 million in the electronics company hoping to ride the wave of the firm’s growing popularity.
The Buzz hears:
Mike Holmes, who left the Carlyle Group years ago to help manage his father-in-law’s chain of Northern Virginia service stations, is becoming chief executive and taking over day-to-day operations of the 37-year-old company, known as Virginia Tire & Auto. Holmes’s father in law, company founder and President Myron Boncarosky, 71, will become chairman. The chain now has 430 employees manning 12 stations, with two in the pipeline, including one in Loudoun and one in Prince William County.
“It’s the evolution of the business,” Holmes said. “It’s been impressive what Myron has been able to do. He put his heart and soul in this business. We will continue to grow and maintain the values he instilled in the company, including professionalism, genuineness, attention to detail and forward thinking.”
Colleen Evans, well-known public relations pro with Marriott and Ritz-Carlton who left that gig in October, is starting a media relations division for ROI, a Northern Virginia-based advertising firm run by David M. Nellis. Nellis is a longtime Washington marketing maven.
Falls Church-based Hubshout, founded by local tech vets Chad Hill and Adam Stetzer, broke the $4 million revenue mark in its fifth year. Hill was an AOL product manager, and Stetzer co-founded Nucleus Solutions, a software company acquired by Hewitt Associates in 2008. Hubshout, with 49 employees, helps provide online marketing campaigns to more than 1,000 small businesses.
The state of the revolution
The second Revolution Growth Investor Conference will be Wednesday and Thursday this week.
The first one was held a year ago at the Miraval Resort in Tucson (which is owned by Revolution Growth co-founder Steve Case). This one will be in D.C., with the business meetings at Revolution’s headquarters near Dupont Circle.
The conference begins with a cocktail party, dinner and Wizards game viewing from the owner’s box at Verizon Center, hosted by Revolution Growth co-founder Ted Leonsis. It closes with a dinner at Steve Case’s historical McLean home, Merrywood. Both Case and Leonsis are speaking at the conference, along with fellow Revolution Growth co-founder Donn Davis.
Approximately 60 Revolution Growth investors from around the country will attend. Among the locals investors and attendees are Ed Mathias (of the Carlyle Group); attorney George Stamas; and Monumental Sports & Entertainment’s Raul Fernandez. Among those presenting at the conference are the CEOs of three area businesses in which Revolution Growth invested over $100 million this past year: Optoro, Sweetgreen and CustomInk