by Osman Parvez
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Shares of Boulder based Pharmion (PHRM) rose +30% yesterday on news that it had agreed to be acquired by Celgene (CElG) in a deal worth $2.9Bn. The virtuous cycle continues.

In the wake of this news, I’m reminded that primary home markets, such as most of the front range, are largely driven by the health of the local economy and job market. As you know, there has been a lot of worry in the press about a recession coming next year. From its peak in September, the S&P 500 (a broad measure of the stock market) has been tracking downward. High oil prices, the declining dollar, deteriorating credit markets, financial company write-downs, and consumers potentially pulling back are concerns.

Meanwhile, how has Colorado’s economy been doing?

Luckily, I don’t have to create my own index for this one. Bloomberg tracks the performance of the Colorado economy with a price-weighted index of its own. The Bloomberg Colorado Index is based on public companies headquartered in Colorado with a minimum market capitalization of $10MM. The index was developed with a base value of 100 as of December 30, 1994. Companies in the index include names you’ve probably heard of such as Pharmion (PHRM), Echostar (DISH), Chipotle (CMG), Crocs (CROX), Janus Capital (JNS), Array Biopharma (ARRY), Ball (BLL), Level 3 (LVLT), Frontier (FRNT), Molson Coors (TAP), Red Robin (RRGB), Qwest (Q), Time Warner Telecom (TWTC), Liberty Media (LINT) and (LCAPA), Vail Resorts (MTN), and Western Union (WU). It also includes dozens you’ve probably never heard of, in a wide array of industries.

The index fell yesterday but it’s up 15.8% year to date. That’s pretty good! Look further back and its even better. Annual appreciation over the past 5 years has been nearly 22%, or up over 170% from 2002.

Take a look at this chart:

I remember when the dot com bubble ended. You can see the index peak in March 2000 and then track downward for the next two years. It’s been on a steady upswing since.

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