I'm calling this Bubble 2.0, and it's ready to burst • Hacker News Board

Re: I'm calling this Bubble 2.0, and it's ready to burst

#131

Post by matwood » Wed, May 09, 2012, 8:37 PM UTC

IsaacL wrote: post #118

matwood wrote: post #106

Earlier quoted context omitted.

Can you point to a few high profile examples of this besides Instagram? There are SO MANY new ways to make money now and new low-friction ways to get distribution. I agree and it's why I think if there is a bubble it's a very narrow one and not a total tech bubble. There are lots of companies making good money right now as you point out. Of course who really knows if Groupon is in the zero revenue group or not since…

since no one has any idea what their financials really look like I'm guessing the SEC has a good idea. http://www.sec.gov/Archives/edgar/data/1490281/0001047469110...

Actually they don't. That SEC document came out in 2011. Auditors are continuing to find issues:

http://blogs.wsj.com/marketbeat/2012/04/02/groupon-ouch/

From the article:

The surprise announcement no doubt raised new alarm bells for investors and analysts. The company has already changed how it counts revenue and has a history of using unconventional accounting metrics to value its business.

But the latest accounting issues — which reflect how the company failed to set aside enough money for customer refunds — occur as the company is trying to gain trust and confidence from investors and analysts.

Re: I'm calling this Bubble 2.0, and it's ready to burst

#132

Post by epo » Wed, May 09, 2012, 8:39 PM UTC

roc wrote: post #84

Estragon wrote: post #71

Earlier quoted context omitted.

It's actually relatively easy to see when it's become fad/fraud driven. The hard part is predicting when the music is going to stop, because that's controlled by the people investing. Some of the best times to invest in a bubble come during the final frenzy. Warren Buffett was absolutely correct that the dot com bubble was vapid, but he still lost money betting that way. People were predicting in 2003 that the housin…

I still think the cut-over from legitimate growth to fad/fraud-driven is murky, but you're absolutely right that it's trivial to identify fad/fraud long before the bust. That said, my feeling is that betting against the bubble is ultimately as bad as betting with it. Either approach can reap enormous gains, if you get the timing right. Which shakes out to: broad bets are little different from gambling. And I think in…

The prudent approach to fad investments is to ignore them, instead find things which are overlooked in the fad, hence undervalued, and put your money in them. I'd be surprised if Buffet was doing anything much different. And, by definition, no one can 'get the timing right' in bubbles, some are lucky, most aren't.

Re: I'm calling this Bubble 2.0, and it's ready to burst

#133

Post by roc » Thu, May 10, 2012, 12:43 PM UTC

meric wrote: post #95

phillmv wrote: post #85

Earlier quoted context omitted.

House prices here in Toronto are totally obscene. I genuinely don't understand how people are forking over $500k on average .

Oh god. I'm in Australia and if you tell me I can get a house for $500k I'll say it's cheap. The apartment I'm living in is worth $550k. The only houses as cheap as $500k are over an hour from the CBD. Where I am living (half hour away), houses start from $800k up to $1.5m. The average (house+apartment) price is still below $600k, though.

Does Australian housing also have a huge influx of Chinese buyers? I wonder to what degree their purchasing overseas is fueling that growth, not unlike Japanese purchasing in the 80s.

Anecdotally, they seem to be heavily involved in Canada's situation.

Re: I'm calling this Bubble 2.0, and it's ready to burst

#134

Post by meric » Fri, May 11, 2012, 4:06 AM UTC

roc wrote: post #133

meric wrote: post #95

Earlier quoted context omitted.

Oh god. I'm in Australia and if you tell me I can get a house for $500k I'll say it's cheap. The apartment I'm living in is worth $550k. The only houses as cheap as $500k are over an hour from the CBD. Where I am living (half hour away), houses start from $800k up to $1.5m. The average (house+apartment) price is still below $600k, though.

Does Australian housing also have a huge influx of Chinese buyers? I wonder to what degree their purchasing overseas is fueling that growth, not unlike Japanese purchasing in the 80s. Anecdotally, they seem to be heavily involved in Canada's situation.

Anecdotally that is one of the factors driving up prices. The other main factor is the slowness in which the government opens up new land for building. Also new buildings on new land are taxed more heavily.

Re: I'm calling this Bubble 2.0, and it's ready to burst

#135

Post by roc » Fri, May 11, 2012, 2:41 PM UTC

meric wrote: post #134

roc wrote: post #133

Earlier quoted context omitted.

Does Australian housing also have a huge influx of Chinese buyers? I wonder to what degree their purchasing overseas is fueling that growth, not unlike Japanese purchasing in the 80s. Anecdotally, they seem to be heavily involved in Canada's situation.

Anecdotally that is one of the factors driving up prices. The other main factor is the slowness in which the government opens up new land for building. Also new buildings on new land are taxed more heavily.

I'll admit I don't know the first thing about the degree of suburban sprawl, or whether greenfield development taxes are sane or not in Australia.

But as an American having grown up and multiply paid for the problems caused by sprawl, I'm definitely on the side of the concept of high greenfield development taxes.

No building is an island and there are very real and very steep costs in maintaining and growing infrastructure to handle sprawl. It's crucial to ensure those costs are accounted for in prices.

But I digress.