Comment by moocow01 | Hacker News Reader

Comment by moocow01 | Hacker News Reader

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"But the irony is that real bubbles sneak on you. Hardly anyone sees them coming. So keep screaming bubble, it makes me feel safe."

I think there is a bubble and I can accept the rest of your viewpoint, but this part is not true. Most people who have a well developed understanding of an industry and basic financial sense easily recognize bubbles and have always done so in the past. The people who it sneaks up on are those who listen to the media and listen to their friends who listen to the media. Bubbles typically start out of real economic growth. The problem is that they outgrow market indicators when you get too many lemmings playing the telephone game and ignoring fundamentals. From what I see around the bay area there seem to be a lot of indicators of this social dynamic playing out. There is lots of money chasing other money to nowhere but Ill agree its not as bad as it was in 2000.

"Most people who have a well developed understanding of an industry and basic financial sense easily recognize bubbles and have always done so in the past."

I try to listen to what people I trust from the industry say about the existence of a bubble. Pretty much all of them say that there is none. For example Ben Horowitz (of Andreesen Horowitz) consistently argues that there is absolutely no bubble (and he was around for the real bubble occurred). See 5:10 - http://www.youtube.com/watch?v=9xzcJnqcTP4

I think that often when markets become hot, people automatically think of a bubble, but that's not necessarily true. The internet has grown from 50 million users to over 2 billion and smartphones were non-existent in the 90s. So perhaps higher valuations for tech companies are justified due to higher potential.

But you could be right, only time will tell.

Ben Horowitz is an investor. You wouldn't think he has a vested interest in this, would you?

The overheated market causes high valuation, which some argue, hurts investors. By saying bubble and discouraging unsophisticated investors from bidding, he probably stands to gain, not lose.

Everyone has a vested interest in what they deal with (or they're amateurs, hence I don't need their opinion). That doesn't mean they never say the truth.

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