4 ms·

Can it really be a bubble if everyone thinks it's a bubble? Who would invest their money in something if they thought it was a bad deal?

twoarrays 10y ago
VCs don't invest their own money; their money come from pension funds, sovereign wealth funds, etc. They make money off deals, so bubble or not, it's a bonus.
contravariant 10y ago
Probably because they think the price will keep rising, and that they'll be out on time. It's basically a pyramid scheme.
losteric 10y ago
It's gamble. You can make money all the way up until the bubble pops.
- busterarm 10y ago
  And if you're really slick, you can make a lot of money after the pop.
- choplifter455 10y ago
  I know nothing about the day trading culture, but do you see a lot of addicted/problem gamblers in that space? I imagine for the good ones it's a bit like a casino, but you've also got an edge based on whatever information you have available.
superuser2 10y ago
Someone who thinks they will unload it on a Greater Fool (TM).
gozur88 10y ago
That was the whole point of day trading. You hold something that's going up because it's going up, with no consideration of the underlying value. And you try to be the first one out the door when the party's over.
- derefr 10y ago
  —which technically works, as long as you're the fastest. Of course, computers are faster than humans. Thus, HFT.
deleted 10y ago
[deleted]
pkaye 10y ago
I'm guessing for the VC and wealthy, it is the "house money effect" If you made $100M on your first company, you can afford to risk $10M hear and there.
dsmithatx 10y ago
More than 50% (I think 60% if still the same) of investment money isn't people trading stocks. It's 401k plans and other retirement and investment vehicles. People with money just want to try and earn money on that money. Many with 401k plans and stock options can't even really trade. The second fear kicks in the market it will fall as always does. I just realized something interesting. 1988 - housing market bubble S&L scandal etc. market crashed. 1998-1999 - dot com bubble burst. 2008 - Housing and lending crashes economy. Seems like the most major events in the markets crashing have been coming every ten years or so. Markets crash and it's called a bubble after but, it's all fueled by media events, fear and then panic selling.
- ktRolster 10y ago
  More than 50% (I think 60% if still the same) of investment money isn't people trading stocks. It's 401k plans and other retirement and investment vehicles. Those people typically aren't investing in startups
  - icebraining 10y ago
    Americans’ Retirement Funds Increasingly Contain Tech Start-Up Stocks http://www.nytimes.com/2015/03/23/business/dealbook/tech-money-sends-funds-on-the-hunt-for-unicorns.html http://www.nytimes.com/2015/03/23/business/dealbook/tech-mon...
    - TheCoelacanth 10y ago
      They report $4.2 billion in tech start-up stocks purchased by mutual funds. The total amount of money in mutual funds in the US has increased by an average of $500 billion dollars per year for the past 15 years. At that rate, tech start-up stocks will never even make up 1% of the fund.

twoarrays 10y ago

VCs don't invest their own money; their money come from pension funds, sovereign wealth funds, etc. They make money off deals, so bubble or not, it's a bonus.

contravariant 10y ago

Probably because they think the price will keep rising, and that they'll be out on time. It's basically a pyramid scheme.

losteric 10y ago

It's gamble. You can make money all the way up until the bubble pops.

busterarm 10y ago
And if you're really slick, you can make a lot of money after the pop.
choplifter455 10y ago
I know nothing about the day trading culture, but do you see a lot of addicted/problem gamblers in that space? I imagine for the good ones it's a bit like a casino, but you've also got an edge based on whatever information you have available.

superuser2 10y ago

Someone who thinks they will unload it on a Greater Fool (TM).

gozur88 10y ago

That was the whole point of day trading. You hold something that's going up because it's going up, with no consideration of the underlying value. And you try to be the first one out the door when the party's over.

derefr 10y ago
—which technically works, as long as you're the fastest. Of course, computers are faster than humans. Thus, HFT.

deleted 10y ago

[deleted]

pkaye 10y ago

I'm guessing for the VC and wealthy, it is the "house money effect" If you made $100M on your first company, you can afford to risk $10M hear and there.

dsmithatx 10y ago

More than 50% (I think 60% if still the same) of investment money isn't people trading stocks. It's 401k plans and other retirement and investment vehicles. People with money just want to try and earn money on that money. Many with 401k plans and stock options can't even really trade. The second fear kicks in the market it will fall as always does. I just realized something interesting. 1988 - housing market bubble S&L scandal etc. market crashed. 1998-1999 - dot com bubble burst. 2008 - Housing and lending crashes economy. Seems like the most major events in the markets crashing have been coming every ten years or so. Markets crash and it's called a bubble after but, it's all fueled by media events, fear and then panic selling.

ktRolster 10y ago
More than 50% (I think 60% if still the same) of investment money isn't people trading stocks. It's 401k plans and other retirement and investment vehicles. Those people typically aren't investing in startups
- icebraining 10y ago
  Americans’ Retirement Funds Increasingly Contain Tech Start-Up Stocks http://www.nytimes.com/2015/03/23/business/dealbook/tech-money-sends-funds-on-the-hunt-for-unicorns.html http://www.nytimes.com/2015/03/23/business/dealbook/tech-mon...
  - TheCoelacanth 10y ago
    They report $4.2 billion in tech start-up stocks purchased by mutual funds. The total amount of money in mutual funds in the US has increased by an average of $500 billion dollars per year for the past 15 years. At that rate, tech start-up stocks will never even make up 1% of the fund.