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Tell Sam Altman: I will take your bet

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Re: Tell Sam Altman: I will take your bet

#131

Post by tibbetts »

mod wrote: post #74
foobarqux wrote: post #63

Earlier quoted context omitted.

Fine, well done. But no one should care that Sam Altman bet that we are not in a bubble against someone who doesn't care much one way or the other but wants his name in the paper.

I doubt anyone really does care. The only thing I'm really interested in is why sama decided the other bettor had to be a VC. That's a pretty silly requirement. Anyway this isn't a ballsy bet at all, really. Guys on 2p2 (poker forums) routinely make huge proposition bets that are more fun, interesting, and risky than this--occasionally for charity, as well (though not that often). Losing this bet will likely do no mo…

I agree, this bet would make more sense if the other party was a hedge fund manager or someone else with a professional interest in being bearish on tech innovators. No active serious VC who's might have raise a fund or invest at a high valuation is going to bet publicly against the unicorns. Might as well just retire.

Re: Tell Sam Altman: I will take your bet

#132

Post by jaredklewis »

ryanx435 wrote: post #118
sama wrote: post #88

Earlier quoted context omitted.

a fair point. i didn't define "VC" well enough. if another VC from a top-tier fund with at least $500MM under management would like to take the bet, i will make the same bet once more.

moving the goal posts? poor tactical decision, sam. you've just undermined your whole position. before, with the open definition of VC, it expressed a high confidence in your bet. now, by limiting the pool of potential bet takers, you are weakening your overall goal of maintaining public perception that there is no bubble. the analogy is boxing. before, you were putting a huge bet that you were the best boxer in the…

I imagine he's interested in a bet with a big VC because they are the ones complaining about high, "bubble" valuations. I doubt Sam really cares one way or another if some random guy/the American public/whoever thinks we are in a bubble.

Re: Tell Sam Altman: I will take your bet

#133

Post by nostrademons »

boomshucka wrote: post #117
sama wrote: post #28

I sort of love that the person willing to take the other side of this is a Boston-area VC :) I accept subject to verification that you really qualify as a VC, and I can't find a website for Immaculate Conception Ventures. What investments have you made and how large is your fund? If terms from the blog post are acceptable I will enter into longbets.

The determination of "valuation" is pretty obnoxious. These preferred securities with liquidation preferences aren't even close to a "common equity" valuation. A VC round at $x valuation isn't remotely similar, economically, to a public co at $x valuation. This bet is more about whether the late stage VC bubble continues for 5 years than any notion of real value.

Isn't that exactly what the bet is?

A bubble that never bursts is indistinguishable from real value. Remember that money is itself a bubble; its only value is that you believe other people will continue to accept it to give you the things you really value. The dollars in your pocket are just pieces of paper; the dollars in your credit card are even more nebulous, they're bits and bytes in your banks' computers. And yet somehow it's worked for thousands of years.

Plus, it's pretty likely that several of the companies listed will go public in the next 5 years, and then their valuation will be the public co $X. If that's lower than the stated figures in the bet, well, Sam will lose.

Re: Tell Sam Altman: I will take your bet

#134

Post by icebraining »

tacos wrote: post #129
icebraining wrote: post #121

Earlier quoted context omitted.

It's $200B on aggregate, so they just need to be worth $33.3B on average. That's more on the level of Adobe than Microsoft.

I understand the bet. I do not think you understand what "averaging $33B" means. For instance Rubbermaid simply owns numerous home, commercial and healthcare markets. They make everything from saws to Sharpies. They doubled their market cap in the last five years. 20,000 employees (more than anyone on that list) $6 billion in revenue (ditto) P/E ratio of 30 ... and they're worth $10B.

Rubbermaid is a razor-thin margin business, with plenty of exposure to both the pressure of retailers like Wal-Mart and the rising costs of supplies, and very little in terms of differentiation from competitors. That's why it went bankrupt and got bought by Newell.

Re: Tell Sam Altman: I will take your bet

#135

Post by tacos »

icebraining wrote: post #134
tacos wrote: post #129

Earlier quoted context omitted.

I understand the bet. I do not think you understand what "averaging $33B" means. For instance Rubbermaid simply owns numerous home, commercial and healthcare markets. They make everything from saws to Sharpies. They doubled their market cap in the last five years. 20,000 employees (more than anyone on that list) $6 billion in revenue (ditto) P/E ratio of 30 ... and they're worth $10B.

Rubbermaid is a razor-thin margin business, with plenty of exposure to both the pressure of retailers like Wal-Mart and the rising costs of supplies, and very little in terms of differentiation from competitors. That's why it went bankrupt and got bought by Newell.

It averaged a gross profit margin of 38% the past five years. While paying a dividend. And doubling the stock price.

Which companies in that list have profits let alone profit margins? And are half as diversified? I see the big upside. I see the big downside. But I don't see how they all grow to average 3x NWL/Rubbermaid in the absence of bubble valuations.

Also all this "2x or 3x" after the big rise talk is just dilly-shaking anyway. The numbskulls who jumped in on the last Tumblr round would've made more money flipping Microsoft stock over the same period. Talk about unnecessary risk for the sake of risk.

Re: Tell Sam Altman: I will take your bet

#136

Post by anaskar »

wpietri wrote: post #86

Hi! I'm delighted to see you'll be using Long Bets: http://longbets.org/ As the programmer behind that, I'm glad to introduce you to the folks at the Long Now that can expedite that.

Didn't know this service existed. Just registered and tossed it up onto product hunt --> http://www.producthunt.com/posts/long-bets

looking forward to see this play out.

Re: Tell Sam Altman: I will take your bet

#137

Post by dkrich »

varunjuice wrote: post #112
dkrich wrote: post #69

Earlier quoted context omitted.

Seriously? As I write this, Microsoft, the largest purveyor of enterprise software in the world, is worth roughly $340 billion. Oracle? Less than $200 billion. Hell, Amazon, the company that Dropbox runs on isn't worth $200 billion. You honestly believe that any one of those companies, none of which has been around for more than ten years, could reach a market cap of $200B within 5 years? Either you are incredibly be…

Major difference between public market valuations vs private market valuations. Particularly, liquidation preference & anti dilution.

There is no such thing as a $200B private market valuation. For a company to have that large of a valuation, it pretty much has to be a publicly-traded company by definition.

If the argument is that somebody bought 0.001% of the company for $2,000,000, therefore 100% of the company is worth $200B, that's just a bridge too far.

Re: Tell Sam Altman: I will take your bet

#138

Post by [deleted] »

tacos wrote: post #135
icebraining wrote: post #134

Earlier quoted context omitted.

Rubbermaid is a razor-thin margin business, with plenty of exposure to both the pressure of retailers like Wal-Mart and the rising costs of supplies, and very little in terms of differentiation from competitors. That's why it went bankrupt and got bought by Newell.

It averaged a gross profit margin of 38% the past five years. While paying a dividend. And doubling the stock price. Which companies in that list have profits let alone profit margins? And are half as diversified? I see the big upside. I see the big downside. But I don't see how they all grow to average 3x NWL/Rubbermaid in the absence of bubble valuations. Also all this "2x or 3x" after the big rise talk is just dil…

[deleted]

Re: Tell Sam Altman: I will take your bet

#140

Post by rajacombinator »

foobarqux wrote: post #36
sama wrote: post #28

I sort of love that the person willing to take the other side of this is a Boston-area VC :) I accept subject to verification that you really qualify as a VC, and I can't find a website for Immaculate Conception Ventures. What investments have you made and how large is your fund? If terms from the blog post are acceptable I will enter into longbets.

Eh, I would be cautious, you might be getting played for publicity. If that's the case it wouldn't serve the purpose of the bet because the other side doesn't have any conviction about the outcome and only wants to raise their profile in the VC world. $100k is probably cheap to get your name in many major news outlets.

It's ok he's also playing for publicity. ;)
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