I can't say I agree with this one bit.
One bubble/bust cycle does not a trend make.
Winter is coming
41–50 of 86 posts
Re: Winter is coming
#42Re: Winter is coming
#43Check out my counter-argument: Why are startups hot now? Not because the economy is good or because the startup ideas people are having are particularly good, but because risk seeking investors are trying to shove capital anywhere they can. After the crash of 2008 lots of avenues (created by Wall Street post Financial Modernization Act) to invest this capital were closed, and the growth of the startup scene, particul…
If joe sixpack is still watching jersey shore italy, listening to lady gaga, eating mcdonald, drinking starbucks, playing medal of honor 4, watching spiderman 5, what makes you think they'll do anything but use facebook, amazon, google, microsoft?
Re: Winter is coming
#44I'm not so sure. I think the broader economic forces may help tech companies rather than hurt. No matter what happens, America (and the world) will still have a lot of very wealthy people and institutions. Those people need to put their money somewhere. The stock market is scary, bonds and banks don't pay anything. If you had $100 million tomorrow to invest what would you do with it? I'd start looking for startups. 1…
I would invest in gold. No hassle. No risk since every country is printing money and putting savers at risk. Doubled in price in dollar in two years thus far.
Gold is the safe bet, but some people like to diversify with some riskier investments.
Re: Winter is coming
#45Winter is icummen in, Lhude sing Goddamm. VCs stop and angels drop, Like aggregate demand.... Sing: Goddamm. Downcast brow and skittish DOW Show profit on the lam Suster shivers, Techcrunch quivers Damn you, sing: Goddamm. Goddamm, Goddamm, (and Groupon's canned), Goddamm, Watch Pincus do facepalm. Sing goddamm, damm, sing Goddamm. Sing goddamm, sing goddamm, DAMM.
lol downvoting this must feel really good!
Re: Winter is coming
#46Check out my counter-argument: Why are startups hot now? Not because the economy is good or because the startup ideas people are having are particularly good, but because risk seeking investors are trying to shove capital anywhere they can. After the crash of 2008 lots of avenues (created by Wall Street post Financial Modernization Act) to invest this capital were closed, and the growth of the startup scene, particul…
If joe sixpack is still watching jersey shore italy, listening to lady gaga, eating mcdonald, drinking starbucks, playing medal of honor 4, watching spiderman 5, what makes you think they'll do anything but use facebook, amazon, google, microsoft?
I'd put it this way: They're using an automatic transmission and flush toilet, so why are they still using Yahoo mail or Windows Vista?
Re: Winter is coming
#47Check out my counter-argument: Why are startups hot now? Not because the economy is good or because the startup ideas people are having are particularly good, but because risk seeking investors are trying to shove capital anywhere they can. After the crash of 2008 lots of avenues (created by Wall Street post Financial Modernization Act) to invest this capital were closed, and the growth of the startup scene, particul…
If joe sixpack is still watching jersey shore italy, listening to lady gaga, eating mcdonald, drinking starbucks, playing medal of honor 4, watching spiderman 5, what makes you think they'll do anything but use facebook, amazon, google, microsoft?
A few years ago joe sixpack was watching jersey shore italy, listening to lady gaga, eating mcdonald, drinking starbucks, playing medal of honor 4, watching spiderman 5, but he did start using facebook, amazon, google, microsoft when products/services from these companies appeared.
Re: Winter is coming
#48Check out my counter-argument: Why are startups hot now? Not because the economy is good or because the startup ideas people are having are particularly good, but because risk seeking investors are trying to shove capital anywhere they can. After the crash of 2008 lots of avenues (created by Wall Street post Financial Modernization Act) to invest this capital were closed, and the growth of the startup scene, particul…
I'm particularly struck by your point about the negative interest rates. The message in recent weeks is a strong commitment not to let interest rates rise, and I believe to keep these interest rates low, the FOMC is intervening in the bond auctions to sop up any slack in demand. I believe they are inflating to finance this, which means that the cycle will continue until a change in policy at the Fed.
Bernanke's term lasts until 2014, if he isn't re-appointed. He might change direction, but this would be going against his history and his beliefs.
You've identified that there's a big, cheap money spigot. The policies are in place to ensure that spigot sticks around for awhile. It will flow into every place it looks like it can get a return above inflation, and that includes high risk situations and various forms of carry trade.
Eventually, this will force inflation rates up enough that people can't ignore it, and as always, there will be a price to pay. But I don't think we're close to that yet.
It's like 2001 all over again, only this time it won't be houses but something else (and startups will benefit like they did between 2002-2007).
Thanks for the food for thought.
Re: Winter is coming
#49I don't agree with much of this for two reasons... 1. The bubble for already funded companies burst in the 90s but that didn't dry up funding. The truth is a wealthy person's best bet in a down economy is a small startup. Because the potential upside is so much better than any other investment. A company like Y Combinator can literally fund hundreds of startups and as long as at least one has a significant payday at…
> the dollar is falling
The dollar doesn't seem to have moved much since 2008. Versus the Euro, it was on a downward trend from ~2004 until mid-2008 or so, but it's been flat since then, albeit with significant volatility: http://www.google.com//finance?chdnp=1&chdd=1&chds=1... Against other currencies, it's down versus the Japanese Yen, but up versus the UK Pound.
In terms of domestic prices, inflation has been running around 1-2%, and futures/bond markets are pricing in an expectation of no inflation, or even possibly deflation, through 2020 or so (with particularly strong consensus in the 5-year window through 2016).
Re: Winter is coming
#50I don't agree with much of this for two reasons... 1. The bubble for already funded companies burst in the 90s but that didn't dry up funding. The truth is a wealthy person's best bet in a down economy is a small startup. Because the potential upside is so much better than any other investment. A company like Y Combinator can literally fund hundreds of startups and as long as at least one has a significant payday at…
> A company like Y Combinator can literally fund hundreds of startups and as long as at least one has a significant payday at the end Y Combinator still comes out on top.
I understand that Y Combinator only does token investment in terms of money, and gets a good share of the startup in exchange for its brand and the experience and connections of its founders within the VC world. Since the actual money outlay is low, it can afford to fund hundreds of startups.
I doubt that's something that the average "wealthy person" can do.