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Interest rates just explain why there's money looking for a better return. But why invest in Uber as opposed to other start-ups? And why invest in start-ups at
by hodgesrm 10y ago
Interest rates just explain why there's money looking for a better return. But why invest in Uber as opposed to other start-ups? And why invest in start-ups at all as opposed to property or existing companies that are available at lower P/E values?
The answer seems to be that many people feel Uber is a decent investment compared to alternatives. If Uber ended up owning some share of self-driving transportation that choice might look prescient or at least not so hard to understand. Something analogous has happened at Amazon, where an unrelated business--AWS--now seems to be driving profitability
- untog 10y ago> The answer seems to be that many people feel Uber is a decent investment compared to alternatives. Yes, but I'm not convinced they think this for sensible reasons. People follow a herd mentality, and invest in Uber simply because others are doing so - if that many people are doing it, it must be a sure thing, right?
- hodgesrm 10y agoI don't think you ever have full visibility into something as speculative as Uber so following the herd is understandable even if it's not likely to yield big returns for most people. Also, I would not discount early investors assuming they can sell out before the levee breaks. That seems pretty rational.