I think the general argument is that people are trying to head warning to those who are less fortunate about seeing the bubble begin to pop.
I think people are trying to be the next "big short" without knowing enough about finance to actually predict anything. Most of the conversations are boring because the arguments that are brought up show a clear lack of understanding and are based on huge incorrect assumptions about the entire world of finance.
In general institutional investors are seeing a trend of other institutional investors worried about bubbles. To me, the contrarian that I am, this says that there is probably no bubble and that the risk of said bubble is way overblown. The assumption that institutional investors are not intelligent and did not watch the same news you did about the 2001 bubble and housing bubble is a very dangerous assumption to make.
My suggestion would be to think a little before jumping to conclusions on this. I do not know whether there is a bubble or not, but assuming one is forming, it hasn’t hit external markets yet and is largely captured in the SV echo chamber. Facebook will be the first big company to IPO from this. Whether they are a dud or not will have very limited impact on public markets since they make up such a small amount of money compared to the rest of world of finance.
If a single investor isn’t investing $500m in a single deal, it is relatively a nonissue. You may want to be worried if you see multibillion dollar investments by single entities. The top 3 asset managers manage over $5 trillion dollars. That means that 50 Facebooks could fit in just that number. That means that Instagram is a rounding error.
The world in SV seems big to you, but has yet to even remotely impact the outside world.
The big secular trend you should be looking at is the fact that everything will be automated. Everything. That will cause job loss for most, but for the hackers here, you can bet there will be a multitude of areas to save big companies and individuals both time and money. There may be a bubble in social, but there is probably not any bubble outside of that.
> The assumption that institutional investors are not intelligent and did not watch the same news you did about the 2001 bubble and housing bubble is a very dangerous assumption to make.
How so? The only dangerous assumption I see is the constant "but it'll be better this time" that the general public irrationally believes. Are the institutional investors not aware of the impending education (lending) bubble as well? Of course they are, because they stand to make money off someone else's loss. It's the Greater Fool Theory at play.[1] Financiers make their money off predictability, and bubbles are much easier to predict (and manipulate) than straight-line growth, with much higher profit potential.
I think people are trying to be the next "big short" without knowing enough about finance to actually predict anything. Most of the conversations are boring because the arguments that are brought up show a clear lack of understanding and are based on huge incorrect assumptions about the entire world of finance.
In general institutional investors are seeing a trend of other institutional investors worried about bubbles. To me, the contrarian that I am, this says that there is probably no bubble and that the risk of said bubble is way overblown. The assumption that institutional investors are not intelligent and did not watch the same news you did about the 2001 bubble and housing bubble is a very dangerous assumption to make.
My suggestion would be to think a little before jumping to conclusions on this. I do not know whether there is a bubble or not, but assuming one is forming, it hasn’t hit external markets yet and is largely captured in the SV echo chamber. Facebook will be the first big company to IPO from this. Whether they are a dud or not will have very limited impact on public markets since they make up such a small amount of money compared to the rest of world of finance.
If a single investor isn’t investing $500m in a single deal, it is relatively a nonissue. You may want to be worried if you see multibillion dollar investments by single entities. The top 3 asset managers manage over $5 trillion dollars. That means that 50 Facebooks could fit in just that number. That means that Instagram is a rounding error.
The world in SV seems big to you, but has yet to even remotely impact the outside world.
The big secular trend you should be looking at is the fact that everything will be automated. Everything. That will cause job loss for most, but for the hackers here, you can bet there will be a multitude of areas to save big companies and individuals both time and money. There may be a bubble in social, but there is probably not any bubble outside of that.