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Comment by 9rx | Hacker News Reader

Bubbles occur when undue attention is directed towards something. When people are asking "are we in a bubble", there is no question that we are in a bubble. Nobody pays attention to things aligned to the fundamentals.

That doesn't mean there will be a crash, though. Not all bubbles pop.

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what are some historical examples of bubbles that didn't pop?

Since this is HN, I'll go with the most obvious: Software development. Unsustainable, speculative growth through the COVID-19 period, but on the other side relatively slow decline.

This is the perfect example of people who constantly cried that it is a bubble but it wasn’t.

Nobody pays attention to things aligned to the fundamentals. When people are crying that there is a bubble, it is a bubble. Plain and simple.

We know for certain it was a bubble as non-bubbles have sustainable growth. As all the software developers now struggling to find work will be happy to tell you, the growth wasn't sustainable. The proof is in the pudding.

How do you prove that software development is a bubble?

Stock prices are at all time high and continuously growing.

> How do you prove that software development is a bubble?

By looking at the software development market. How else would you do it? Salaries rose sharply from 2020-2023, but then plateaued and are now starting to decline. Slowly, however. It did not crash. It ticks the boxes: Rapid price appreciation, speculation, a disconnect from fundamentals, widespread media attention, and an eventual correction.

> Stock prices are at all time high and continuously growing.

If we're sharing random facts: Global average temperature is also at an all time high and continuously increasing.

1. the labour market has not much to do with whether it is a bubble or not

2. definition of bubble is that the market cap must precipitously reduce, which it hasn't.

> the labour market has not much to do with whether it is a bubble or not

How can the very market we're talking about not indicate whether there is a bubble in that market or not? Do you think we should be looking at the price of soybeans instead?

> definition of bubble is that the market cap must precipitously reduce, which it hasn't.

Incorrect. It has, just not by very much. Which isn't surprising as we already established that there wasn't a crash.

What is your definition of bubble then? If not by market cap?

Why read comments in isolation? We already went over this:

- Rapid price appreciation

- Speculation

- A disconnect from fundamentals

- Widespread media attention

- An eventual correction

If market cap, how do you explain housing bubbles? Market cap is not applicable to housing.

of course market cap of housing went down! individual houses fell down in price.

that didn't happen for tech stocks. you are making your own definitions of bubble - the sufficient thing to happen is for the market cap to go down precipetously which it didnt.

> of course market cap of housing went down! individual houses fell down in price.

Traditionally, market cap only refers to companies. I accept your pet definition that includes any kind of market, but then we can apply it to the software development market just the same. Individual software developers have fallen in price. There was not a significant drop, but a slow decline.

> that didn't happen for tech stocks.

Nor gold. But what does that have to do with the software development market? Are you under the impression that stock certificates write code?

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