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I find the argument that this isn't a bubble because the people driving up valuations are private investors to be a bit of a red herring. That doesn't affect b

I find the argument that this isn't a bubble because the people driving up valuations are private investors to be a bit of a red herring. That doesn't affect bubbletude, just who gets hurt if and when it pops. Inflationary bidding with the expectation of continued growth forms bubbles wherever it happens. Otherwise, the point about bubbledom being determined by the strength of the companies involved is valid. So too, is the point about diversified revenue streams speaking to a stronger underlying market. I'd actually like to see more on this last point. We can all agree that it makes sense that a market that relies on a single revenue stream (advertising) would be shakier than a diversified one, but I'd like to see some analysis into how diversified the current market is, and what that says about it's fundamental strength.

gruseom 16y ago
the argument that this isn't a bubble because the people driving up valuations are private investors Whose argument is that? Chris certainly didn't make it. His argument (implicitly) is that this isn't a bubble because the tech sector has sound fundamentals. The point about private investors is unrelated. If anything it's somewhat at odds with the rest of the post.
- redthrowaway 16y ago
  You're right, I was imprecise with my statement. His argument is that it's better that inflationary investing is happening in private markets, and while that's true for the general public, I'd still say that that has no impact on whether or not we're in a bubble. If there is a bubble, and it does pop, that would be very bad for the HN crowd. The fact that VCs and investment bankers would be losing most of the money doesn't change the fact that a whole lot of devs will be out of work, and there will be a few lean years of funding for people trying to launch. In fact, for just about anyone who cares whether or not there's a tech bubble, its existence would be bad. So yes, while it may be better for the economy as a whole to have the risk taken by a select few, it won't matter much to the rest of us.

gruseom 16y ago

the argument that this isn't a bubble because the people driving up valuations are private investors Whose argument is that? Chris certainly didn't make it. His argument (implicitly) is that this isn't a bubble because the tech sector has sound fundamentals. The point about private investors is unrelated. If anything it's somewhat at odds with the rest of the post.

redthrowaway 16y ago
You're right, I was imprecise with my statement. His argument is that it's better that inflationary investing is happening in private markets, and while that's true for the general public, I'd still say that that has no impact on whether or not we're in a bubble. If there is a bubble, and it does pop, that would be very bad for the HN crowd. The fact that VCs and investment bankers would be losing most of the money doesn't change the fact that a whole lot of devs will be out of work, and there will be a few lean years of funding for people trying to launch. In fact, for just about anyone who cares whether or not there's a tech bubble, its existence would be bad. So yes, while it may be better for the economy as a whole to have the risk taken by a select few, it won't matter much to the rest of us.