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As an outsider who watched a couple of bubbles from the outside (dotcom and housing), it seems that the likelihood of being in one ends up being inversely propo

by rpeden 14y ago

As an outsider who watched a couple of bubbles from the outside (dotcom and housing), it seems that the likelihood of being in one ends up being inversely proportional to the vociferousness with which those on the inside claim it's not a bubble. i.e. Tell a Pets.com shareholder in 1999 that owning company stock and they'd look at you incredulously and tell you how we're in a new economy. Or tell a homeowner in early 2007 that prices are crazy and it might be a good time to sell, and they'd look at you like you had two heads because, as everyone knows, house prices always go up.

wtvanhest 14y ago
This is really interesting. It seems like everyone on HN, arguably the people who are most inside this industry are agreeing it is a bubble. Usually that only happens after it is in mid/late pop. Is it possible that people are just scared of bubbles as we are reminded every day of the housing bubble? Alternatively is it possible that there is a specific asset class (ad based platforms) which may be in a bubble? Possibly it is a real bubble across startups that will certainly pop? I have no idea, but it is very strange to see so many people talking about a bubble before it is clearer the bubble is bursting.
- rpeden 14y ago
  I see a lot of people who are inside the industry as employees agreeing that it is a bubble. But I see a lot of people inside the industry as investors saying it isn't. I'm not sure if that means anything, though.
  - olefoo 14y ago
    I would take the words of the employees over that of the investors, you tend to be a little more clear eyed and less inclined to gamble when it's your livelihood at stake. That said, the bubble we're in is mostly a media creation; people want to hear good financial news from somewhere, and if it's based on someone paying for popularity ( Facebook buying Instagram )in the mobile cat-picture-sharing space; it will still get more attention than it's worth. Meanwhile the real economy is still in a serious demand slump, and has structural issues that prevent it from achieving anything but tepid growth. And while that situation obtains, excess capital will be looking for alpha in the technology sector.
    - wtvanhest 14y ago
      Maybe, but I didn't see anyone in the real estate business (employees, not investors) in any vertical or business saying there was a bubble until mid 2007. By that point, valuations had started coming down and financing was being much, much more selective. I stand by my point that it is strange for an industry to call out bubble repeatedly when there isn’t any real evidence of a bubble besides a few anecdotal acquisitions at what people believe to be high prices because they use a non-revenue metric. Again, I don’t know if there is a bubble or not, but it seems odd for a group to call a bubble so early unless there is already drying liquidity. I really have no idea. It just doesn’t seem as self-evident to me.
    - deleted 14y ago
      [deleted]

by rpeden 14y ago

wtvanhest 14y ago

This is really interesting. It seems like everyone on HN, arguably the people who are most inside this industry are agreeing it is a bubble. Usually that only happens after it is in mid/late pop. Is it possible that people are just scared of bubbles as we are reminded every day of the housing bubble? Alternatively is it possible that there is a specific asset class (ad based platforms) which may be in a bubble? Possibly it is a real bubble across startups that will certainly pop? I have no idea, but it is very strange to see so many people talking about a bubble before it is clearer the bubble is bursting.

rpeden 14y ago
I see a lot of people who are inside the industry as employees agreeing that it is a bubble. But I see a lot of people inside the industry as investors saying it isn't. I'm not sure if that means anything, though.
- olefoo 14y ago
  I would take the words of the employees over that of the investors, you tend to be a little more clear eyed and less inclined to gamble when it's your livelihood at stake. That said, the bubble we're in is mostly a media creation; people want to hear good financial news from somewhere, and if it's based on someone paying for popularity ( Facebook buying Instagram )in the mobile cat-picture-sharing space; it will still get more attention than it's worth. Meanwhile the real economy is still in a serious demand slump, and has structural issues that prevent it from achieving anything but tepid growth. And while that situation obtains, excess capital will be looking for alpha in the technology sector.
  - wtvanhest 14y ago
    Maybe, but I didn't see anyone in the real estate business (employees, not investors) in any vertical or business saying there was a bubble until mid 2007. By that point, valuations had started coming down and financing was being much, much more selective. I stand by my point that it is strange for an industry to call out bubble repeatedly when there isn’t any real evidence of a bubble besides a few anecdotal acquisitions at what people believe to be high prices because they use a non-revenue metric. Again, I don’t know if there is a bubble or not, but it seems odd for a group to call a bubble so early unless there is already drying liquidity. I really have no idea. It just doesn’t seem as self-evident to me.
  - deleted 14y ago
    [deleted]