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Secondary shops flooded with unicorn sellers

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Re: Secondary shops flooded with unicorn sellers

#101

Post by clock_tower »

nostrademons wrote: post #92
enraged_camel wrote: post #90

Earlier quoted context omitted.

I think you should both put your money where your mouths are: longbets.org

Don't even need Longbets; just invest in or short the stock market.

Shorting is very risky, since the downside risk is unlimited if you guess wrong. (Imagine shorting Microsoft based on the low quality of their code, sometime around MS-DOS 1.0.) It's better to buy businesses that will go up when the market goes down, or ones that are recession-proof in general, while avoiding cyclically sensitive businesses and, especially, any sectors that are about to have bubbles burst in them.

If the near future is the unicorn version of the dot-com bubble, its aftermath would be a good time for tech stocks you're interested in.

Re: Secondary shops flooded with unicorn sellers

#102

Post by malandrew »

beatpanda wrote: post #96
superuser2 wrote: post #85

Earlier quoted context omitted.

I predict the bust will happen because the HN/Silicon Valley hivemind so obviously wants it to and so we'll all bet on each other's failure until it is realized. It really seems like if we all agreed to keep the music playing, the music would continue playing. But once we decide it's going to stop, it has to.

No. The people at the top providing the money for this circus are the ones with the power to stop the music, and they're stopping it because the companies they funded aren't performing. You actually can't just keep dumping money into companies that are doing nothing but burning it. But, yes, for the record, I do want the bubble to burst, because the world has real problems and I just got a cold recruiting email from…

How will a bust all of a sudden make sure that all that brain talent starts working on something worthwhile? A bust just means that instead of improving their skills while working on something useless, they will instead be looking for work which will be equally useless and they won't be improving their skills.

Say what you will of all the bullshit we fund, every one of those represent projects where talent can improve their skills, and many of these will eventually stop working at a bullshit startup and get recruited by one of the companies actually building something valuable.

Re: Secondary shops flooded with unicorn sellers

#103

Post by nostrademons »

clock_tower wrote: post #101
nostrademons wrote: post #92

Earlier quoted context omitted.

Don't even need Longbets; just invest in or short the stock market.

Shorting is very risky, since the downside risk is unlimited if you guess wrong. (Imagine shorting Microsoft based on the low quality of their code, sometime around MS-DOS 1.0.) It's better to buy businesses that will go up when the market goes down, or ones that are recession-proof in general, while avoiding cyclically sensitive businesses and, especially, any sectors that are about to have bubbles burst in them. If…

Options, then. Buy a put option and your downside is limited to the cost of the option; you just get nothing if it's out of the money.

My point is that there are plenty of financial instruments that exist precisely so you can "put your money where your mouth is".

Re: Secondary shops flooded with unicorn sellers

#104

Post by pjlegato »

dhj wrote: post #8
mmanfrin wrote: post #2

Semi related question: One has to be an accredited (i.e. wealthy) investor to invest in startups, but this does not apply to employees exercising options. Does that mean that employees who do not meet the wealth requirements to be accredited are only ever able to sell ownership, and only to accredited investors?

If the company is private then employees exercising options generally (always?) have clauses that restrict them from selling that stock whether they are accredited investors or not. Not a lawyer, but I think there may be two reasons: 1) prevent covert takeover from the original founders 2) prevent a general market for private companies (before IPO). IPO involves a lot of regulatory overhead to confirm full disclosure…

More typically, the company has the "right of first refusal" -- when a stockholder has an outside offer, they are first required to let the company buy their stock back at the price that the outsider is offering before selling to an outsider.

This is both to maintain control and to avoid having more than 500 shareholders, which triggers all kinds of additional regulations.

Re: Secondary shops flooded with unicorn sellers

#105

Post by skewart »

nerfhammer wrote: post #89
Spooky23 wrote: post #75

Earlier quoted context omitted.

There is no shortage of real estate, and real estate historically is very cyclical. Even in an insane place like SFO, a few high profile failures can shutdown the cash pipeline for all sorts of companies. No cash, no coders, no rent. 2008 proved that when people are underwater, they walk away from mortgages because they see no consequence.

In the 2008 crisis home prices dropped by like 10-15%. The housing market didn't collapse. It's not as if the "bubble burst" and housing was worthless after that.

Like other comments have pointed out, some markets did see much bigger collapses in prices. The markets that did had seen huge price increases driven largely by speculation in 2002-2007.

In the early to mid 00's the idea of "flipping" real estate became popular. The idea was that you would agree to buy a property, and then sell it very quickly, often setting up a deal to sell it before you even fully closed on it yourself. There were a lot of more-or-less amateur investor types who flocked to markets with cheap real estate and strong population growth - e.g. Las Vegas and Phoenix - and started flipping houses. This was pure speculation completely divorced from underlying demand.

I don't think there is anything like that happening today - at least not nearly on as large a scale. So, while I would disagree with the idea that "the market didn't collapse" - it did in some locations - I certainly do agree that it's not likely to collapse in quite as dramatic a way any time soon.

Re: Secondary shops flooded with unicorn sellers

#106

Post by [deleted] »

superuser2 wrote: post #97
beatpanda wrote: post #96

Earlier quoted context omitted.

No. The people at the top providing the money for this circus are the ones with the power to stop the music, and they're stopping it because the companies they funded aren't performing. You actually can't just keep dumping money into companies that are doing nothing but burning it. But, yes, for the record, I do want the bubble to burst, because the world has real problems and I just got a cold recruiting email from…

>"Silicon Valley" is a spectacular, world historical squandering of brain power and it needs to stop. Are you implying that there are less-frivolous actors offering competitive salaries and getting ignored, or that SV is inflating the price of programming labor? Because if the latter, and you're hoping for a correction of programming salaries down to lower-middle-class clerical work that humanitarians can afford, won…

[deleted]

Re: Secondary shops flooded with unicorn sellers

#107

Post by beatpanda »

superuser2 wrote: post #97
beatpanda wrote: post #96

Earlier quoted context omitted.

No. The people at the top providing the money for this circus are the ones with the power to stop the music, and they're stopping it because the companies they funded aren't performing. You actually can't just keep dumping money into companies that are doing nothing but burning it. But, yes, for the record, I do want the bubble to burst, because the world has real problems and I just got a cold recruiting email from…

>"Silicon Valley" is a spectacular, world historical squandering of brain power and it needs to stop. Are you implying that there are less-frivolous actors offering competitive salaries and getting ignored, or that SV is inflating the price of programming labor? Because if the latter, and you're hoping for a correction of programming salaries down to lower-middle-class clerical work that humanitarians can afford, won…

I can say this much -- I have exactly one friend who also works as a software engineer. The rest of my friends are activists, students, service industry workers and non-tech entrepreneurs who are getting absolutely crushed by the cost of living in the Bay Area. A massive, "catastrophic" crash in the tech industry would, on balance, be great for all of them.

Re: Secondary shops flooded with unicorn sellers

#108

Post by Spooky23 »

nerfhammer wrote: post #89
Spooky23 wrote: post #75

Earlier quoted context omitted.

There is no shortage of real estate, and real estate historically is very cyclical. Even in an insane place like SFO, a few high profile failures can shutdown the cash pipeline for all sorts of companies. No cash, no coders, no rent. 2008 proved that when people are underwater, they walk away from mortgages because they see no consequence.

In the 2008 crisis home prices dropped by like 10-15%. The housing market didn't collapse. It's not as if the "bubble burst" and housing was worthless after that.

My cousin bought a $600k home in Florida for $250k. That was pretty common.

Re: Secondary shops flooded with unicorn sellers

#109

Post by sry_only_anon »

danjayh wrote: post #23

I think that this is just the beginning. In my opinion, we're heading for a tech bust that's going to spread to the rest of the economy, and deflate additional bubbles (housing, for one). The government has been pushing cheap money for the better part of a decade in the name of creating the appearance of a 'recovery', but what they've really done is build a new house of cards. Make no mistake: the 'free' money that's…

In places like SV and Vancouver housing prices are not strongly connected to the economic reach of the median person.

China has a middle class as big as the entire US, and a huge number of millionaires in USD, and an unstable, opaque state-run economy, so huge numbers of rich Chinese are buying real estate abroad to protect their wealth and to give their kids a life in the US.

I would be happy to see a movement to keep Chinese money out of the U.S. housing market, at least in places like SV.

Re: Secondary shops flooded with unicorn sellers

#110

Post by tayo42 »

JavaScriptrr wrote: post #9

The last couple of years, everytime someone would ask the cliché 'is there a bubble?' Question to a VC, they all waved it away. The questions were legit because of the insane valuations that have been thrown around. How often in History have companies like MagicLeap for example, got to billion+ valuation before ever launching a product. Evernote is a legit business, yes but same story. Blown up by investors. The bubb…

I don't understand why magic leap has so much investment with nothing to show. Just in general I don't see how it could be worth that much. It's cool in a nerd way but doesn't seem to have real value. Like how is this going to make a meaningful impact on the world?
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