SAN FRANCISCO (04/19/2000) - Palo Alto bargain hunters who came out Sunday hoping to buy a discounted Porsche found that none were yet to be had. And indeed the local economy in Silicon Valley has been so hot that even the market's momentary tanking could not immediately cool it off. Take Carlsen Motor Cars, a Palo Alto Porsche, Audi and Volkswagen dealership, a favorite shopping destination among new VCs and dot-com millionaires.
When Apple Computers and the rest of Silicon Valley crashed in the early 1990s, Carlsen's sales dropped off significantly, said Ron Burton, a 33-year-old sales manager who's worked there for 12 years. Similarly, Netscape's troubles in the mid-1990s also led to a cancellation of orders, he says. But Burton was feeling no pain Sunday afternoon. The showroom floor had about a half-dozen customers, and he had already taken a few orders that morning. And because customers would have to wait six months to two years to get their $112,000 Turbos delivered, there seemed to be no cause for immediate panic.
"They could come in with bags of cash and they'd still have to wait," said Burton, noting that there were no signs yet of a shakedown in his business. "We haven't seen a flurry of cancellations and we're still taking orders at the same steady pace," he said. It generally takes about 90 days for a market downturn to have an impact, Burton adds, though he said he personally wasn't betting on a long-term bear market. Sure, he added, his tech-heavy retirement fund took a beating, with its growth rate down from 80 percent to 30 percent for the year.
Yet that didn't stop him from placing orders Friday to buy stock in Cisco and Microsoft. And he sounded as savvy as any CNBC commentator as he talked about the necessary consolidation in the tech sector and how it would only leave some players even bigger and stronger. "How could you say no to these established companies at these low prices?" he said. "I couldn't resist. If I had more cash, I'd have bought even more."