The New Tech Bubble

#1

Post by ireadzalot » Thu, May 12, 2011, 6:15 PM UTC

"Compared with the rest of corporate America, Silicon Valley feels like a boomtown. Valuations are once again soaring. In our leader, we point out the differences from the last tech bubble, but we still think that irrational exuberance has returned to the internet world."

The New Tech Bubble
economist.com

Re: The New Tech Bubble

#2

Post by ireadzalot » Thu, May 12, 2011, 7:57 PM UTC

From the article: This time is indeed different, though not because the boom-and-bust cycle has miraculously disappeared. It is different because the tech bubble-in-the-making is forming largely out of sight in private markets and has a global dimension that its predecessor lacked.

Re: The New Tech Bubble

#3

Post by GeoffreyHull » Thu, May 12, 2011, 7:59 PM UTC

Bubbles require genuine belief of a large group of experts and leaders. They need to be convinced that eyeball counts will rise forever, that real estate will keep going, and that the growth potential of users is near infinite. They will come up with lots of analysis to protect their viewpoints and their belief will get more profound with every passing minute. I dont see that type of blind naivete in today's tech community

Re: The New Tech Bubble

#4

Post by ireadzalot » Thu, May 12, 2011, 8:15 PM UTC

GeoffreyHull wrote: post #3

Bubbles require genuine belief of a large group of experts and leaders. They need to be convinced that eyeball counts will rise forever, that real estate will keep going, and that the growth potential of users is near infinite. They will come up with lots of analysis to protect their viewpoints and their belief will get more profound with every passing minute. I dont see that type of blind naivete in today's tech com…

What do you say to the fact that Skype just sold for $8.5 billion when it's income is only about $400 million? And there is Color that is valued at $100 million even though its product is in almost-beta? Anyone who has watched the tech. industry for the past few years could notice that the way valuation of tech. companies are going up, it is alarming and exude "exuberance".

(Figures mentioned above are from the original article).

Re: The New Tech Bubble

#5

Post by ksolanki » Thu, May 12, 2011, 8:31 PM UTC

There is a bubble of tech bubble articles. No?

Edit: What I mean here is that we seem to like to read about "the new tech bubble". It still is largely a speculation, no matter what arguments are presented. The present time may, just may be a golden period for tech innovation, rather than a bubble.

Re: The New Tech Bubble

#6

Post by 18pfsmt » Thu, May 12, 2011, 8:42 PM UTC

ireadzalot wrote: post #4

GeoffreyHull wrote: post #3

Bubbles require genuine belief of a large group of experts and leaders. They need to be convinced that eyeball counts will rise forever, that real estate will keep going, and that the growth potential of users is near infinite. They will come up with lots of analysis to protect their viewpoints and their belief will get more profound with every passing minute. I dont see that type of blind naivete in today's tech com…

What do you say to the fact that Skype just sold for $8.5 billion when it's income is only about $400 million? And there is Color that is valued at $100 million even though its product is in almost-beta? Anyone who has watched the tech. industry for the past few years could notice that the way valuation of tech. companies are going up, it is alarming and exude "exuberance". (Figures mentioned above are from the origi…

Consumer focused companies are barely ever valued correctly, and it is the reason to invest in mature stocks with predictable incomes. Consumers are simply too finicky, and revenue is just too erratic. Today, I bought tech cominco(TCK), and later hypercom(HYC). I already have sell orders in, and we'll see how it goes (as an example).

Re: The New Tech Bubble

#7

Post by maigret » Thu, May 12, 2011, 8:47 PM UTC

This may be a private tech bubble though. To me it don't seems like tech stocks are too inflated compared to the revenues we can see. Facebook may be overvalued, the Skype buy was very expensive, VCs invest like crazy, but all of that is private investment. Does anyone here see a risk for the stocks also?

Re: The New Tech Bubble

#8

Post by frisco » Thu, May 12, 2011, 8:48 PM UTC

The fact that "are we in a bubble?" is the question on everyone's mind is highly telling.

Re: The New Tech Bubble

#9

Post by [deleted] » Thu, May 12, 2011, 8:54 PM UTC

GeoffreyHull wrote: post #3

Bubbles require genuine belief of a large group of experts and leaders. They need to be convinced that eyeball counts will rise forever, that real estate will keep going, and that the growth potential of users is near infinite. They will come up with lots of analysis to protect their viewpoints and their belief will get more profound with every passing minute. I dont see that type of blind naivete in today's tech com…

[deleted]

Re: The New Tech Bubble

#10

Post by borism » Thu, May 12, 2011, 9:00 PM UTC

maigret wrote: post #7

This may be a private tech bubble though. To me it don't seems like tech stocks are too inflated compared to the revenues we can see. Facebook may be overvalued, the Skype buy was very expensive, VCs invest like crazy, but all of that is private investment. Does anyone here see a risk for the stocks also?

Skype buy was very expensive...but all of that is private investment

meh?