4 ms·

Interesting to see if that's what people were thinking in 1999.

by JMiao 20y ago

zaidf 20y ago
I was a kid admittedly but from what I remember and heard, few used the word "bubble" until it actually burst. I love the following excerpt from an article: "Do you think that a $300 million valuation of a combined company is realistic?" "No question," said the older one, spreading his hands. "The Internet? Slam dunk," said the younger. You can read the entire thing here: http://www.wired.com/wired/archive/6.06/es_burnrate_pr.html http://www.wired.com/wired/archive/6.06/es_burnrate_pr.html
- JMiao 20y ago
  No, I hear ya. =) But my question is if few people could recognize the coming of a bubble in 1999, what makes you think they're better at calling one out today? i.e. how easy it is to say "get out before the bubble bursts"
  - zaidf 20y ago
    You really have to understand the bubble of '99. Such a bubble isn't even possible today. Yes there are few odd investments here and there but that is vastly different from having deadbeat IPOs of '99 era that were based on pure hype. Closest bubble bursting we might see this time around may be IF adsense/adwords collapse. Even then it will be on a much smaller scale than before. And to be honest, knowing the smart folks behind google, I don't see such a thing happening overnight. At the helm of '99 bubble were young grads and hype filled underwriters; at the helm of the bubble today(if you can even call it a bubble) are a buncha PhDs and a very smart CEO(Eric Schmidt).
    - JMiao 20y ago
      Not that I have an opinion on whether there's a bubble going on today, but I'd like to point out that there can be more than one "Bubble," you know. I'm just saying it's very difficult to really identify and act on a bubble when you yourself are entrenched in the middle of it.
- nostrademons 20y ago
  I was a teenager during the dot-com boom. I started calling it a bubble around 1997, which in hindsight was a little early, but was pretty close to when rationality started to depart. By the time it got to 1999/2000, there was absolutely no doubt in my mind that it was a bubble, and most of the people I hung around with did too. (A few of them bought tech stocks anyway because they have poor impulse control, but even they said it was a bubble.) The journalists who were saying "slam dunk" in 1999 were idiots. It's like Bush saying that "nobody could've foreseen the insurgency when we invaded": plenty of people did see it, it's just that he didn't. So it was with the dot-com bust: plenty of people did see it coming, but they got out of the market and didn't scream very hard when it actually did happen. Smart people a.) don't fall for bubbles and b.) don't crow about how smart they were afterwards. The four words you have to watch out for: "This time it's different." When you see them, you can be fairly certain that you're in a bubble. It's not that things aren't different, it's that the differences are always too subtle for a journalist (or really anyone not an expert in the particular field) to pick out. So when someone says that this time it's different, they've usually fallen for hype, and that's when you need to watch out.

Interesting to see if that's what people were thinking in 1999.

by JMiao 20y ago

Interesting to see if that's what people were thinking in 1999.

zaidf 20y ago

I was a kid admittedly but from what I remember and heard, few used the word "bubble" until it actually burst. I love the following excerpt from an article: "Do you think that a $300 million valuation of a combined company is realistic?" "No question," said the older one, spreading his hands. "The Internet? Slam dunk," said the younger. You can read the entire thing here: http://www.wired.com/wired/archive/6.06/es_burnrate_pr.html http://www.wired.com/wired/archive/6.06/es_burnrate_pr.html

JMiao 20y ago
No, I hear ya. =) But my question is if few people could recognize the coming of a bubble in 1999, what makes you think they're better at calling one out today? i.e. how easy it is to say "get out before the bubble bursts"
- zaidf 20y ago
  You really have to understand the bubble of '99. Such a bubble isn't even possible today. Yes there are few odd investments here and there but that is vastly different from having deadbeat IPOs of '99 era that were based on pure hype. Closest bubble bursting we might see this time around may be IF adsense/adwords collapse. Even then it will be on a much smaller scale than before. And to be honest, knowing the smart folks behind google, I don't see such a thing happening overnight. At the helm of '99 bubble were young grads and hype filled underwriters; at the helm of the bubble today(if you can even call it a bubble) are a buncha PhDs and a very smart CEO(Eric Schmidt).
  - JMiao 20y ago
    Not that I have an opinion on whether there's a bubble going on today, but I'd like to point out that there can be more than one "Bubble," you know. I'm just saying it's very difficult to really identify and act on a bubble when you yourself are entrenched in the middle of it.
nostrademons 20y ago
I was a teenager during the dot-com boom. I started calling it a bubble around 1997, which in hindsight was a little early, but was pretty close to when rationality started to depart. By the time it got to 1999/2000, there was absolutely no doubt in my mind that it was a bubble, and most of the people I hung around with did too. (A few of them bought tech stocks anyway because they have poor impulse control, but even they said it was a bubble.) The journalists who were saying "slam dunk" in 1999 were idiots. It's like Bush saying that "nobody could've foreseen the insurgency when we invaded": plenty of people did see it, it's just that he didn't. So it was with the dot-com bust: plenty of people did see it coming, but they got out of the market and didn't scream very hard when it actually did happen. Smart people a.) don't fall for bubbles and b.) don't crow about how smart they were afterwards. The four words you have to watch out for: "This time it's different." When you see them, you can be fairly certain that you're in a bubble. It's not that things aren't different, it's that the differences are always too subtle for a journalist (or really anyone not an expert in the particular field) to pick out. So when someone says that this time it's different, they've usually fallen for hype, and that's when you need to watch out.