There was definitely a trade collapse that might have impacted valuations somewhat.
Bubble talk (2015)
31–40 of 80 posts
Re: Bubble talk (2015)
#32I dont think he won the first bet did he? Airbnb, Palantir, Dropbox, Uber, Spacex, and Pinterest together are less than 200 bn and falling. All still pretty good companies (not you Uber), doing interesting things though. bet 2 - I have not done the calculation, but just stripe puts it way beyond the 27 bn figgure. bet 3 - plenty of good companies in that batch. Razorpay was valued at half a billion dollars in last ro…
Uber: 50.73 bln Spacex: 33.3 bln? Airbnb: 35 bln? Palantir: 26 bln ? Pinterest: 10.4Bln Dropbox: 7.44 Bln They are far from $200bln, so he certainly lost the first one. Might have won the other 3 though.
To me, the outcome is just another example of the power of diversification and that we really don’t know anything about which stocks or companies are best. Stripe alone made Bet 2 worth it.
Re: Bubble talk (2015)
#33Regardless of the fact that he missed by a bit, this type of writing is way more valuable than the standard NYT/Bloomberg "OMG IS IT A BUBBLE???" articles?
I would say so. The writer is giving analysis with money and reputation on the line using specific metrics.
It gives us something to measure and review. It also adds/removes credibility when we read another article with his analysis.
Re: Bubble talk (2015)
#34The market can stay irrational longer than you can stay solvent.
Yeah, a better bet would be about those companies actually delivering profits and "growing into their vaulations", as people politely put it. None of those companies have earned a single dollar for shareholders. Not a single dollar.
Didn’t early stage investors in Uber and Pinterest made money when they IPO’d?
Re: Bubble talk (2015)
#35I dont think he won the first bet did he? Airbnb, Palantir, Dropbox, Uber, Spacex, and Pinterest together are less than 200 bn and falling. All still pretty good companies (not you Uber), doing interesting things though. bet 2 - I have not done the calculation, but just stripe puts it way beyond the 27 bn figgure. bet 3 - plenty of good companies in that batch. Razorpay was valued at half a billion dollars in last ro…
It checks out if you move the much larger valuations in bet 2 to bet 1 as he really underestimated the companies in bet 2. Things are a bit random, so I'd say he arguably won the bet in spirit even though he didn't do it according to his own exact rules.
Aka he lost the bet :)
Re: Bubble talk (2015)
#36Earlier quoted context omitted.
So it was a bubble then?
Perhaps, but dealt with via smaller adjustments rather than catastrophic collapse. The underlying principles of the companies is sound, just priced a bit too high. The market fixed it (as it is supposed to do)
“Fixed” is too definitive of a word, isn’t it? Who knows if the market is correct right now.
Repriced, adjusted, revaluation. Those seem more appropriate for the timeframe.
More time is needed to tell if it was fixed or not.
Re: Bubble talk (2015)
#37I dont think he won the first bet did he? Airbnb, Palantir, Dropbox, Uber, Spacex, and Pinterest together are less than 200 bn and falling. All still pretty good companies (not you Uber), doing interesting things though. bet 2 - I have not done the calculation, but just stripe puts it way beyond the 27 bn figgure. bet 3 - plenty of good companies in that batch. Razorpay was valued at half a billion dollars in last ro…
Bet 2, 3 are (more or less) bets that VC will continue to overvalue companies in the presence of cheap credit. Bet 1 is what the rest of the market thinks. Altman is a decent VC, so no surprise he'd "win" 2 & 3.
Re: Bubble talk (2015)
#38There was definitely a trade collapse that might have impacted valuations somewhat.
I would argue that Trump is the worst president in history but can we please leave names like “Cheeto-in-chief” on reddit?
Re: Bubble talk (2015)
#39I'm actually surprised that he didn't win this bet since it wasn't really based on non-bubble metrics in the first place. A more interesting bet to me would have have involved profitability, P/E ratio, or some other long-term indicator that current high-rolling unicorns are actually sustainable businesses. I think WeWork has demonstrated pretty clearly that billions of dollars of VC money can prop up unsustainable companies for more than 5 years (i.e. the market can remain irrational longer than the term of this bet).