Here Comes Another Bubble v1.1 - The Richter Scales

I don't think there's a bubble at all. The original tech bubble happened because companies IPO'd really early, and Joe Average Investor took equity out of his home or took cash advances on his credit cards and invested it in high tech stocks. This inflated the value of those stocks, causing more Joe Average Investors to pour money into high tech stocks. Lather, Rinse, Repeat until mid-2000 when that cycle collapsed.

There are precious few IPO's right now. And, the people investing in startups right now are accredited investors i.e angels and VC's. There isn't money rushing in from Joe Average Investor in the US, because by law they can't invest in a non-publicly traded company.

Angels and VC's plan on a bunch of companies in their portfolio failing. They typically expect to lose money on %40-70 of their investments, break even on %30 of their investments and hopefully make a 2X to GoogleX return on their money on the %10-30 of the companies that "succeed".

There are around 250,000 millionaires in the San Francisco Bay Area and 600,000 millionaires in NYC.[1] That's a huge pool of people that can afford to write a check for $25-50k without really hurting if they lose that money. A lot of those people are also increasingly willing to write a check to a couple of entrepreneurs with a promising product and a bit of traction. Why? Because they would rather do that with some of their wealth rather than pay a professional money manager %3 of their investment a year to manage their money for them.

ref [1]: http://www.us.capgemini.com/news/current_news.asp?ID=840

Please people, when you submit something 2+ years old, indicate it in the title. (2007 in this case)

My view on this is that the first internet wave came too early. In the late 90s, society was not ready for the changes the internet were bringing (disintermediation, killing of distribution channels, ...). The tech was oversold by eager business people to an audience that was not asking for it & oftentimes did not understand it. Now at least people 'get' the internet. Sometimes I feel we're only now fulfilling the promises we made ten years ago.

For some time I have a feeling that we have 1996/1997 again - this video is from 2007...

No, wallstreet died before this could end up in a real bubble.

But there is always next time.