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But back to the original proposition, is this indicative of a bubble when you drop 1 Billion, or >1% of your estimated market cap on a preventive/defensive meas
by wallawe 15y ago
But back to the original proposition, is this indicative of a bubble when you drop 1 Billion, or >1% of your estimated market cap on a preventive/defensive measure?
- niels_olson 15y agoyou ever play chess? A pawn is 2.6% of your game's value.
- deleted 15y ago[deleted]
- corin_ 15y agoI daresay that's true, but not exactly relevant. I've also played blackjack, roulette, rock/paper/scissors, and I'm not sure if logic and tactics that work in games are always valid business plans...
- kevinqualters 15y agoThere is not really a clear cut metric for deciding if we are in another bubble or not.
- larrys 15y agoThere are a few ways to look at this. The 1% is in cash and shares and we don't know the proportion or I haven't seen that anywhere so far. Now to put the question in context if you have a small company that is worth, say $500,000, then 1% is $5000 you might spend that much (in cash alone yearly) as "insurance", say for property/casualty or liability. And you would pay that no matter what the business climate if you perceived a risk to your business, right? But it could indicate a bubble simply because if the market is up people are more likely to overpay for anything because they feel very upbeat and enthusiastic about the future. So paying a large number (and 1 billion is a large number and not trivial no matter how you slice it) would be more likely to happen in a bubble. But there are to many variables in this that are not know to draw a definitive conclusion. That said my feeling is we are in a period of irrational exuberance.