Every year since the original dot com bubble, there have been posts asking and speculating we're in a bubble. Yet the clocks keep ticking.
Are we entering another bubble?
11–20 of 29 posts
Re: Are we entering another bubble?
#12Someone - a very wise, very successful someone - once provided a pretty good definition of a bubble. A bubble is when the fundamentals are right, but the timing is wrong. For example, let's consider the most recent housing bubble. The housing bubble was predicated - at least in the beginning - on the fact that populations are growing, but land mass (and livable land mass, at that) remains constant. If we work under t…
I think what you have is a handful of 800 pound gorillas who have successfully figured out how to monetise information hoovering up start ups for talent and information that they can plug into their own platforms & monetise. Everything else is perhaps feeding off that, so my bet would be, this all stops when someone ends up buying twitter, that might well be google, at that point everyone will be busy integrating all their new data into their existing products and attempting to monetise it.
My 2cents anyway.
Re: Are we entering another bubble?
#13There is a Bubble in Bubble Predictions; Robert Shiller http://www.dailyfinance.com/2012/04/11/robert-shiller-on-the...
Re: Are we entering another bubble?
#14A bubble is made from more than insane valuations - it requires a thorough delusion about the inherent value of the asset-class that's the source of the bubble. In the dotcom bubble, anyone that did anything online was considered infinite revenue potential, even if they had no revenue and no business plan. In the mortgage bubble, no-one had the fantasy to imagine the real-estate market going down on the whole. The ra…
"In other words, if this bubble pops, who will loose out? Will it have catastrophic consequences for the economy at large?" Bubbles aren't defined solely by the extent of their damage post-pop. They're defined by the delta between bubble valuation and real value. In admittedly simplistic terms: the size of that delta, multiplied by the number of people who buy into it, usually dictates the impact of the burst. Right…
"People often point out that the frothy tech startups of 2012 are fundamentally unlike the frothy tech startups of 1999..."
I've always thought it interesting how 1999 is always the benchmark people use, and never any of the years prior when the bubble was forming. People's logic seems to be "Until we meet or exceed the apex of the last bubble (ie, 1999), we don't need to worry."
Re: Are we entering another bubble?
#15Earlier quoted context omitted.
The problem is that even the strong, viable firms have insane valuations. A lot of them are great companies, they're just overvalued. Take Facebook--$100 billion valuation, more than Unilever, Anheuser-Busch, Amazon, McDonalds, or Cisco. Seriously ?
Welcome to the information age. Facebook has orders of magnitude more information about nearly everyone than those companies. There's no predicting how much they can profit from it yet. Facebook's valuation represents that unknown upside combined with an upward trajectory. The valuation may or may not turn out to be overly high right now, but it's by no means insane.
I don't know... Data in itself is not valuable, you have to be able to monetize it.
How much is it worth to know everything about a 20-something buried under a mountain of student loans, who is not inclined to buy expensive furniture, stereo systems, or cars anytime soon? Hundreds of dollars? Really? Add to that that the tech trendsetters and early adopters are not enthusiastic supporters of facebook anymore and seem ready to jump on the next big thing.
When I read the story yesterday about the company wishing to mine data how many people have sex in the bathroom after hooking up through the site, I figured this whole obsessive data collection thing has jumped the shark a bit.
Maybe it makes sense for the moment - as in the absence of revenues, user profiles attracts VC - but it does remind me a lot of the bubble in early 2000.
Re: Are we entering another bubble?
#16Earlier quoted context omitted.
Welcome to the information age. Facebook has orders of magnitude more information about nearly everyone than those companies. There's no predicting how much they can profit from it yet. Facebook's valuation represents that unknown upside combined with an upward trajectory. The valuation may or may not turn out to be overly high right now, but it's by no means insane.
I don't know... Data in itself is not valuable, you have to be able to monetize it. How much is it worth to know everything about a 20-something buried under a mountain of student loans, who is not inclined to buy expensive furniture, stereo systems, or cars anytime soon? Hundreds of dollars? Really? Add to that that the tech trendsetters and early adopters are not enthusiastic supporters of facebook anymore and seem…
A great many 20-somethings ARE in fact inclined to buy expensive furniture, stereo systems and cars.
Whether they should be or not, in your and my opinion, is not germane to the value that they have because of the fact that they are.
Re: Are we entering another bubble?
#17A bubble occurs when people who shouldn't invest, invest and ultimately lose money.
Right now it's still just a bunch of rich guys investing, which won't effect the 99% when they lose money.
Re: Are we entering another bubble?
#18A bubble occurs when people who shouldn't invest, invest and ultimately lose money. Right now it's still just a bunch of rich guys investing, which won't effect the 99% when they lose money.
Sure, but the rich guys are LPs in VC funds next to institutional investors who get their money straight from QE.
Re: Are we entering another bubble?
#19I hope so. Bubbles are fun
Seriously. Bubbles are where you get paid outlandish sums to program computers for a living. They're where your silly web startup gets bought for $40M for no particular reason. They're where you watch your stock portfolio double in six months, then double again four months later. A Bubble is truly a great time to be alive.
The important point is to recognize a Bubble for what it is and don't make the mistake of thinking you're actually as rich as you seem to be. Cash out frequently into things that are actually worth money, and don't go buying that $1.6M house that you can "afford" with all this "money" rolling in.
It'll stop rolling in soon enough. Then most of it will roll back out. And if you stay smart you will have had an absolutely great time of it.
At least that was my experience in the late 90's, quadrupling the salary, being "one year from retirement", then unquadrupling the salary and having a regular amount of savings and a regular looking stock portfolio. But while it was happening, it sure was good.
Re: Are we entering another bubble?
#20Earlier quoted context omitted.
Welcome to the information age. Facebook has orders of magnitude more information about nearly everyone than those companies. There's no predicting how much they can profit from it yet. Facebook's valuation represents that unknown upside combined with an upward trajectory. The valuation may or may not turn out to be overly high right now, but it's by no means insane.
I don't know... Data in itself is not valuable, you have to be able to monetize it. How much is it worth to know everything about a 20-something buried under a mountain of student loans, who is not inclined to buy expensive furniture, stereo systems, or cars anytime soon? Hundreds of dollars? Really? Add to that that the tech trendsetters and early adopters are not enthusiastic supporters of facebook anymore and seem…
They are monetizing it. No one knows how far they can push it and what additional data they can acquire. They are actively working to change privacy norms on a cultural level.
To declare unilaterally that Facebook is overvalued is a failure to see what's happening right before you. Note that I'm not saying it isn't overvalued, but just that Facebook is making money today, and they have a lot of upside that no other company has right now.