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I read this analysis that before the Dotcom bubble burst, unicorns cashed out in a similar fashion. The authors were proposing to watch for the next wave as an

I read this analysis that before the Dotcom bubble burst, unicorns cashed out in a similar fashion. The authors were proposing to watch for the next wave as an indicator, as VCs would be trying to cash at the best time (or at all) before a recession.

hkmurakami 7y ago
This hopefully shouldn't be a surprise for those looking to invest in the public stock market, given the ample amount of caution many participants have been expressing over the last 12+ months regarding our current status of being in the late stages of economic expansion.
- pascalxus 7y ago
  This will be known as the everything bubble, everyone saw coming. I don't think anyone's going to be surprised when this melt down arrives. Though the length of recovery needed to bounce back will surprise people who haven't been watching the public/private US/Global deficits over the last 20 years.
  - aaronblohowiak 7y ago
    How are your assets currently allocated? I have 71% cash, bonds, and CDs. 20% equities, and the rest in private placements.
  - dehrmann 7y ago
    > This will be known as the everything bubble Not really; there isn't the irrational exuberance that the dot com, housing, or bitcoin bubbles had. There aren't stories about people getting rich quick, new normals, etc. > ...deficits over the last 20 years. You're onto something here. There's definitely been an increase in government spending. The other thing going on is that there was a lot of quantitative easing following 2000 and 2008. There's another word for everything going up: inflation. Maybe that's what we're seeing, but government inflation metrics are missing it for some reason.
    - dillutedfixer 7y ago
      > there isn't the irrational exuberance that the dot com, housing, or bitcoin bubbles had. I would counter that by saying that throwing money at companies that literally say they may never be profitable (Lyft, Uber), and valuing them at insanely high amounts is pretty irrational.
      - dehrmann 7y ago
        Depends on how likely that is. Uber and Lyft choose not to be profitable. Unless demand is so elastic that cutting R&D and raising fares to cover costs never breaks even (the pets.com scenario), there are some big levers for making those companies profitable. Granted, they could still be profitable and overvalued.
      - wskinner 7y ago
        That line is standard in S-1s. [1] https://www.quora.com/Is-it-standard-to-say-you-may-never-achieve-or-maintain-profitability-ie-Snapchat-IPO-filing https://www.quora.com/Is-it-standard-to-say-you-may-never-ac...
    - rubiquity 7y ago
      > Not really; there isn't the irrational exuberance that the dot com, housing, or bitcoin bubbles had > There's definitely been an increase in government spending. Perhaps the government spending is the irrational exuberance this time.
      - pas 7y ago
        Yes and no. The problem is that more and more people are dependent on gov transfers for part (or whole) of their income. ( https://fred.stlouisfed.org/graph/fredgraph.png?g=q5u https://fred.stlouisfed.org/graph/fredgraph.png?g=q5u ) Whereas growth benefits mostly the wealthy. ( https://fred.stlouisfed.org/graph/fredgraph.png?g=q5v https://fred.stlouisfed.org/graph/fredgraph.png?g=q5v ) And gov spending is less and less "productive", education spending is not increasing, whereas spending in simply population sustainment does.
    - 7y ago
  - pas 7y ago
    > Though the length of recovery needed to bounce back will surprise people who haven't been watching the public/private US/Global deficits over the last 20 years. Could you explain a bit what do you mean by this?
    - pascalxus 7y ago
      The US gov has had large deficit spending equivalent to 3-4% of GDP per year for the last 20 years, and yet GDP per capita has only increased 1% per year. That's pretty darn bad. That's like driving your car petal to the meddle and only managing 21mph. Check this out, 5th chart down on all the coutnries and their debts: https://democracyjournal.org/magazine/42/the-private-debt-crisis/ https://democracyjournal.org/magazine/42/the-private-debt-cr... It might not be so bad if it was just the US. But, most of all the major countries in the world all have a similar problem with deficits: France, England, Japan, and even China. All of their debts (public + private) are about 200% of GDP and over. But, what's most striking is the difference between 1980 and today. That massive increase shows that the level of spending we're accustomed to is not sustainable.
  - agent008t 7y ago
    Who says there has to be a meltdown? We could just have stagnation for a long time. The policies may allow for poor allocations of resources to persist, leading to a stagnation in total productivity and in the median standard of living. See, e.g., USSR 1964-1987, or Japan recently.
rapsey 7y ago
It makes complete sense. Private money dries up, only thing left to do is go public. A wave of IPOs from companies that do nothing but burn money can only be seen as a forward indicator of trouble.

hkmurakami 7y ago

This hopefully shouldn't be a surprise for those looking to invest in the public stock market, given the ample amount of caution many participants have been expressing over the last 12+ months regarding our current status of being in the late stages of economic expansion.

pascalxus 7y ago
This will be known as the everything bubble, everyone saw coming. I don't think anyone's going to be surprised when this melt down arrives. Though the length of recovery needed to bounce back will surprise people who haven't been watching the public/private US/Global deficits over the last 20 years.
- aaronblohowiak 7y ago
  How are your assets currently allocated? I have 71% cash, bonds, and CDs. 20% equities, and the rest in private placements.
- dehrmann 7y ago
  > This will be known as the everything bubble Not really; there isn't the irrational exuberance that the dot com, housing, or bitcoin bubbles had. There aren't stories about people getting rich quick, new normals, etc. > ...deficits over the last 20 years. You're onto something here. There's definitely been an increase in government spending. The other thing going on is that there was a lot of quantitative easing following 2000 and 2008. There's another word for everything going up: inflation. Maybe that's what we're seeing, but government inflation metrics are missing it for some reason.
  - dillutedfixer 7y ago
    > there isn't the irrational exuberance that the dot com, housing, or bitcoin bubbles had. I would counter that by saying that throwing money at companies that literally say they may never be profitable (Lyft, Uber), and valuing them at insanely high amounts is pretty irrational.
    - dehrmann 7y ago
      Depends on how likely that is. Uber and Lyft choose not to be profitable. Unless demand is so elastic that cutting R&D and raising fares to cover costs never breaks even (the pets.com scenario), there are some big levers for making those companies profitable. Granted, they could still be profitable and overvalued.
    - wskinner 7y ago
      That line is standard in S-1s. [1] https://www.quora.com/Is-it-standard-to-say-you-may-never-achieve-or-maintain-profitability-ie-Snapchat-IPO-filing https://www.quora.com/Is-it-standard-to-say-you-may-never-ac...
  - rubiquity 7y ago
    > Not really; there isn't the irrational exuberance that the dot com, housing, or bitcoin bubbles had > There's definitely been an increase in government spending. Perhaps the government spending is the irrational exuberance this time.
    - pas 7y ago
      Yes and no. The problem is that more and more people are dependent on gov transfers for part (or whole) of their income. ( https://fred.stlouisfed.org/graph/fredgraph.png?g=q5u https://fred.stlouisfed.org/graph/fredgraph.png?g=q5u ) Whereas growth benefits mostly the wealthy. ( https://fred.stlouisfed.org/graph/fredgraph.png?g=q5v https://fred.stlouisfed.org/graph/fredgraph.png?g=q5v ) And gov spending is less and less "productive", education spending is not increasing, whereas spending in simply population sustainment does.
  - 7y ago
- pas 7y ago
  > Though the length of recovery needed to bounce back will surprise people who haven't been watching the public/private US/Global deficits over the last 20 years. Could you explain a bit what do you mean by this?
  - pascalxus 7y ago
    The US gov has had large deficit spending equivalent to 3-4% of GDP per year for the last 20 years, and yet GDP per capita has only increased 1% per year. That's pretty darn bad. That's like driving your car petal to the meddle and only managing 21mph. Check this out, 5th chart down on all the coutnries and their debts: https://democracyjournal.org/magazine/42/the-private-debt-crisis/ https://democracyjournal.org/magazine/42/the-private-debt-cr... It might not be so bad if it was just the US. But, most of all the major countries in the world all have a similar problem with deficits: France, England, Japan, and even China. All of their debts (public + private) are about 200% of GDP and over. But, what's most striking is the difference between 1980 and today. That massive increase shows that the level of spending we're accustomed to is not sustainable.
- agent008t 7y ago
  Who says there has to be a meltdown? We could just have stagnation for a long time. The policies may allow for poor allocations of resources to persist, leading to a stagnation in total productivity and in the median standard of living. See, e.g., USSR 1964-1987, or Japan recently.

rapsey 7y ago

It makes complete sense. Private money dries up, only thing left to do is go public. A wave of IPOs from companies that do nothing but burn money can only be seen as a forward indicator of trouble.