21–25 of 25 posts
Why are there bubbles in the first place? Would it not be in the interest to prevent trillions of dollars in losses due to economic bubbles bursting? Or is that part of a finance game where shorting companies becomes very profitable?
If you can figure out why bubbles happen and are able to predict them then there's a Nobel in economics waiting for you
There's a bunch of options. One of the most obvious, as an investor, is to hoard cash now. When the bubble bursts, your dollar will go further; you'll get better valuations, companies will be more desperate, etc. As an entrepreneur, time to make hay while the sun is shining; raise cash now. Looking for hedge? Consider SF real estate. A big part of what's keeping it sky high is the proliferation of startups in SoMa, m…
How would SF real estate be a hedge if the regional tech labor market becomes depressed? Lower wages in SF and the surrounding area should depress real estate prices in SF, not increase real estate prices.
You can accomplish this through companies that own property in the area.
Earlier quoted context omitted.
How would SF real estate be a hedge if the regional tech labor market becomes depressed? Lower wages in SF and the surrounding area should depress real estate prices in SF, not increase real estate prices.
It won't be a good hedge. You'll take a bath on that real estate if the venture capital market seizes up (eg with higher interest rates and were a bubble to pop). Rents will fall, vacancies will soar, and a lot of construction will halt. I can't see what the parent meant, such that it makes sense as a hedge. The hedge (if one were really worried about a bubble popping) on SF real estate would be to sell right now - i…
I meant to suggest it as something you could short - it's an asset class that is tied to the health of the sector. Since it's hard to short the companies in the sector, you could short the RE as a proxy.
My 2 cents... In 2008 and 2009, when so many of my most talented friends were unemployed for the only time in their career, I observed, "It's a once in a lifetime opportunity to start a company. Better to be starting a firm when talent is plentiful and money is scarce than the other way around." So what to do now that it's the other way around? (Independent of calling it a bubble, money is relatively more plentiful t…
Thanks for this. get it from investors with as long a time horizon as possible Can you elaborate on how to evaluate this? I'd imagine you could just ask them if you already have a relationship, otherwise by looking at the age of their fund?
If you're up front about your expected burn rate and the amount of funding you're asking for, that will help select the right group too. (You can't ask for 10 years of funding, but you can go for more than the year that many settle for)
It's difficult for many entrepreneurs to hedge, particularly young or first-time entrepreneurs, because a supermajority of their net worth is in their company. If you own a software company and have $10k in your IRA there is no option available which causes that IRA to suddenly be worth an appreciable portion of the value of the software company given some event which severely compromises the worth of the software co…