Contrarian Investor Shuns Hot Idea for Bigger Picture

As investors clamor for shares of social media darlings, Peter Thiel is avoiding the frenzy.

“Is Twitter worth $7 billion?” the venture capitalist said.

“The broader question is, Is it going to help people have a much higher quality of living? And I think on that score, its benefit is a lot less.”

Mr. Thiel — Facebook’s first outside investor and a co-founder of PayPal — is not just knocking the competition. He has a visceral aversion to market exuberance. By the time an idea like social networking is widely accepted, Mr. Thiel, 43, thinks it is passé.

“He’s always starting with the premise of, What does everyone else believe that’s erroneous?” said Keith Rabois, a friend of Mr. Thiel’s and former PayPal executive.

Mr. Thiel, an entrepreneur turned investor, is more than a simple iconoclast. He is also the founder of the hedge fund Clarium Capital Management and a full-time prognosticator who says he makes “determinant views of the future.” His macroperspective defines his investments in start-ups and securities.

He’s focused on what he sees as a lack of innovation in the United States. Although the last 40 years have brought advancements in computers and the Web, Mr. Thiel is nostalgic for the 1960s, when people were still dreaming of putting a man on the moon. He describes the decade — and the 200 years that preceded it — as a “golden era” for technology.

Continue Reading: http://dealbook.nytimes.com/2011/05/19/contrarian-investor-shuns-hot-idea-for-bigger-picture/?partner=rssnyt&emc=rss

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