Money Is Pouring into Tech Like It’s 1999, and That's Not Good | Hacker News Reader

Money Is Pouring into Tech Like It’s 1999, and That's Not Good

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119 pointscyphersanctus57 comments

An interesting twist in the current incarnation is this story is how big "private" money is taking risks on the tech sector.

Overall, I don't really find this story convincing for a few of reasons, though I suppose there is plenty of room for disagreement. (1)T he first boom actually did get a lot right. The PC-internet revolutions was intense and did create a lot of new value. The mistake was treating it like a land grab where all major players would be established by the year 2000. (2) Scale does matter when we are talking about bubbles.Smaller means safer. (3) There is real revenue being generated by Google, Facebook and every reason to think it will be generated by Uber too. (4) Private money doesn't (I hope) break the economy in the same way that public money can. If VCs go bust there are ramifications, but these markets are not that liquid. There aren't margin calls going off and forcing fire sales. (5) War chests: The big boys and many of the up-and-comers have nice big war chests. They are obviously concerned about equity, but Facebook would be very hard to kill with a sharp decrease in stock price. Options might need to give way to bonuses, but the Facebook is no longer in the business of selling equity. They have plenty of cash. This goes doubly for Google, MSFT, Apple & a surprising number of no-rush-to-IPO mega startups like Uber , Airbnb, Dropbox Snapchat, etc. Their continued existence is not dependent on the market for tech stock.

Bubbles are some sort of unstable financial complex that can be brought down as soon as the equilibrium is broken. In 99' the money was ultimately coming from IPOs and public markets. When that well dried, everything went bottom up.

The recent financial crash was bullet on financial instrument tautologies, a system that created correlated risk. It could only continue to exist so long as everyone could maintain that the risk was much smaller than it was.

Think of the companies in question. Most could continue to survive if investors hid in a hole for two years, that's robust. Smaller, younger startups would be in for hard times if investment stopped coming in, but 1,000 $10m (on paper) startups going under is a just 1,000 individual failures. This is correlated in the sense that a shortage of cash would effect them all, but it's not systemic in that their failure would extend far beyond the investors, founders & employees that understand the risk.

Even small start ups should continue to do ok -- the hardware overhead for early stage stuff now is so cheap it is nearly free. Models that require huge scale before the revenue comes in could be a problem.

I self-funded so my opinion is likely wrong, but it seems like a lot of the excess money is going to questionable things in addition to paid growth (no clue how much Uber, Lyft, and others are spending, Groupon certainly took the paid acquisition to the extreme buying up huge chunks of available online inventory.) Luxurious offices are nice but hardly necessary for a serious coder or designer.

Perhaps the most vulnerable are the start ups that already exist and are dependent on investor money to operate. In the event of a market pull back desperate companies should be easy pickings for the big boys to acquire talent and other interesting goodies.

Leverage -- that makes bubbles very dangerous and unpredictable. Investor leverage is one thing, companies' own leverage is quite another. Last I looked (a year ago), tech was the best of the best by this metric. For public companies in other sectors, its a wonder if they would be worth anything in another major credit crunch. The corporations we keep hearing about having massive cash stock piles have liabilities to match. A concern would be Facebook's or Apple's market cap dropping 50%+ . Go to 0? No.

I think point (4) is the key here. The original bubble happened on the public exchanges with public money. The "IPO" was the big deal that everyone wanted to get in on after Netscape, et al valuations went crazy. Institutional investors were investing people's retirement accounts into companies they didn't understand. When that finally fell over, the impact was felt across the economy because it involved everybody's money.

This time the money is largely coming from private equity and there's not a lot of splashy IPOs happening. The people who are investing aren't mom and pop planning for their retirement. If a big VC firm looses it's shirt it's not as likely to have the impact on "Main Street" as we saw the last time around.

I'd like to say that I don't care one whit if a bunch of rich people suddenly loose their money, but if history has anything to show, it's that they'll somehow figure out a way to make the rest of us feel the pain too.

> This time the money is largely coming from private equity and there's not a lot of splashy IPOs happening.

This is an amusing statement in light of the fact that the largest IPO in history (Alibaba) took place last week.

Compare to the 99's. One couldn't keep track of all the IPOs back then.

Anyway, the VC bubble will not pop alone. It'll take stocks with it (or the other way around), and people will suffer worldwide again.

> Compare to the 99's. One couldn't keep track of all the IPOs back then.

There have been close to 200 IPOs this year. How many people here can, by memory alone, name more than 10?

I'm not at all arguing that the IPO market of 2014 is the IPO market of 2000 reincarnated (it absolutely isn't), but anecdotal analyses that boil down to "it was crazier in 2000!" aren't very meaningful.

I'll paraphrase a comment I wrote on reddit about this yesterday.

Alibaba has a PE ratio one tenth of amazon - and is already a profitable company. This is the exact opposite of what a bubble is.

This is not at all like the kind of IPOs leading to the 2000 crash.

I didn't comment on Alibaba's financials. I simply responded to the statement that "there's not a lot of splashy IPOs happening," which I found somewhat amusing in light of the fact that the arguably "splashiest" IPO just took place.

That said, Alibaba's profitability and PE ratio compared to Amazon is meaningless in the context of a bubble discussion. A bubble does not merely consist of unprofitable companies becoming ridiculously valued; it consists of profitable companies becoming more highly valued than their fundamentals can support.

If Amazon's stock price fell by 25%, and Alibaba's did the same, as an Alibaba shareholder would you take comfort in the fact that Alibaba still has a PE ratio one tenth Amazon's? Of course not.

If Amazon's stock price fell by 25%, and Alibaba's did the same, as an Alibaba shareholder would you take comfort in the fact that Alibaba still has a PE ratio one tenth Amazon's? Of course not.

Actually, yes, I would take comfort in that fact. It would mean that Alibaba was far more likely to recover its value.

> It would mean that Alibaba was far more likely to recover its value.

You seem to misunderstand what the PE ratio actually represents.

As an experiment, I'd suggest you test your hypothesis against actual market data. Hint: you will have no problem finding stocks with higher than industry average PE ratios pre-2008 crash that have significantly outperformed their lower PE ratio counterparts since the market bottom in 2009.

This would in fact be amusing if "a lot" == "1".

Not sure why its amusing; the presence of fewer splashy IPOs means less competing alternatives for the money of those investors seeking splashy IPOs to sink money into.

Insofar as "splashy" is mostly a factor of media attention in the runup, there being fewer splashy IPOs might itself contribute directly to the splashy IPOs that do exist being bigger (there's other contributors, too -- if the media isn't as prone to drive attention to every tech IPO, it means the IPOs that are splashy are likely splashy because of some fundamental newsworthy feature, which often includes things like strength in the fundamentals or the amount of money sought to be raised, that is, IPOs have to be set-up to be bigger to be splashy.)

>> "I'd like to say that I don't care one whit if a bunch of rich people suddenly loose their money, but if history has anything to show, it's that they'll somehow figure out a way to make the rest of us feel the pain too."

Definitely. The hiring market in our industry is _on fire_ right now, we are treated well, paid fairly, etc. When the hard times come, it might be a little less cushy to be an engineer/data scientist.

It's not cushy (to be an engineer). IT in it's current form is demanding (I like the "intense 24/7 activity" phrase). We are paid well for a reason and ofc it MAY feel cushy when you are on top of things. But this requires more than 8 hours a day, 5 days a week and some non-IT hobbies. I am even arguing on the side of "people just applying stuff" and ofc. the ones creating IT for them to use: No time to trim the beard (was prioritized down).

> IT in it's current form is demanding (I like the "intense 24/7 activity" phrase). We are paid well for a reason and ofc it MAY feel cushy when you are on top of things. But this requires more than 8 hours a day, 5 days a week and some non-IT hobbies.

I disagree with this (and it's certainly not my experience). If you put in these hours, on average you'll likely be better compensated, but you can very much make quite a lot of money in the objective and relative (to everyone else) sense without putting in absurd hours.

"This time the money is largely coming from private equity and there's not a lot of splashy IPOs happening."

There's a lot of public wealth caught up in the stock market in general right now. Technology is especially overvalued (e.g. Amazon at $150Bn, Yelp and Pandora at $5Bn, etc.) despite having more earnings than bubble v1.0. But even if you believe that the downside of a tech crash is limited, you're forgetting that technology is unlikely to crash without dragging down the entire market -- the same forces that are propping up tech are propping up everything else.

Moreover, people keep talking about hedge funds as if they're completely dissociated from the larger market. But a lot of pension, retirement and other "conservative" wealth has been flooding into these funds seeking a return over the last few years. Grandma's retirement not isolated from the health of the tech industry; it's just harder for journalists to see the risk this time, because it doesn't look like last time.

Remember: This Time It's Different! (tm)

> Private money doesn't (I hope) break the economy in the same way that public money can. If VCs go bust there are ramifications, but these markets are not that liquid. There aren't margin calls going off and forcing fire sales.

Too many people trying to compare today's bubble to the first bubble are making the mistake of assuming that it's being led by tech. It isn't.

The current "tech bubble" is just one of multiple bubbles being driven by an even larger bubble in public equities. When the public equities bubble bursts, Silicon Valley will this time be a victim, not the culprit. And there are going to be lots of other victims as well.

> Smaller, younger startups would be in for hard times if investment stopped coming in, but 1,000 $10m (on paper) startups going under is a just 1,000 individual failures. This is correlated in the sense that a shortage of cash would effect them all, but it's not systemic in that their failure would extend far beyond the investors, founders & employees that understand the risk.

How many people are employed by these startups? How would a glut of now-unemployed startup workers affect wage trends? How many non-tech businesses in the Bay Area are thriving on the tech funny money?

Companies like Google and Facebook aren't going anywhere, even if their stock prices become heavily depressed for some time. And despite tech's prominence, the Bay Area economy is still fairly diverse. But it's short-sighted to believe that a significant decline in the number of funded startups would be of minimal impact to anyone but investors, founders and employees.

>> "The current "tech bubble" is just one of multiple bubbles being driven by an even larger bubble in public equities..."

This is interesting. Could you elaborate on some of the other sub-bubbles? Not being facetious, am really curious.

I know nothing about finance but the Federal Reserve has provided new money at almost no interest to banks for a fairly long period of time from ~2008 onwards (this was called quantitative easing). This essentially forced the EU and countries like Switzerland to do the same, if they did not want their currency to get too strong. It is not a stretch of imagination that this fueled much of the current stock market boom, both Euro and Dollar have lost a lot of value at roughly the same pace.

Yeah, the fed loans money to banks at, essentially, zero interest, and the banks then use it to invest in the stock market, or some such. They make money, because the market isat all-time highs. They pay back the fed, and keep their profits.

All the major firms do this. It's nuts, but our government literally lends free money to investors on Wall Street so they can make millions of dollars on trades.

Of course, this all comes tumbling down when the markets are in bad shape. And, unlike most people in this thread, I fully expect any and all bubbles to burst due to some outside influence: Ebola, 9/11, war, etc. Something big happens to scare the markets, and the big party here in the Valley is over. Who know when that will happen, but it feels like the next year or so will be the time frame, if my gut is any indication.

Burn that capital while you can, folks!

There is a real-estate / state government sourced investment bubble in China ATM.

In short, the Chinese federal government sets GDP growth targets for each and every state. Every state is therefore obligated to meet these targets. Post 2009, real GDP growth has been underperforming, and more of the remaining GDP has to be made up for in infrastructure spending (which includes building apartments, airports, and the usual roads, bridges rails etc on debt). This is visible in various "ghost" cities and malls which have popped up recently (in addition to undercapacity airports and elaborate train stations). This in itself isn't necessarily a problem. The problem comes in when increasingly, a large amount of the money the states are lending is coming from "shadow loans" (unregulated black-market loans, analogous to sub-prime mortgages (kindof)) because regular forms of more legitimate financing have dried for these purposes (too much infrastructure already).

This is simultaneously fueled by difficulties rich Chinese have in being able to invest abroad, leaving condos in these ghost cities being owned, and purchased by investors' excess capital as assets (similar to a real estate bubble as what happened in Dubai a few years ago).

This excess capital, sourced from underperforming Chinese states leaking over to other markets, have been responsible for local real estate bubbling over in major cities like London, Vancouver, San Francisco, New York, etc by foreign nationals buying these properties as investments as a way to shelter money. It's very likely this capital is also indirectly being displayed in public equity markets.

(note: this is my own analysis of several articles and reports I read, so take it with a grain of salt)

"The current 'tech bubble' is just one of multiple bubbles being driven by an even larger bubble in public equities."

I would be interested in how you reason to that statement. I enjoyed reading Michael Pettis' blog entry[1] about excess capital, which provided an alternative narrative to the rise in equities but it wasn't really a bubble so much as it was just an excess of capital.

To your question "How many people are employed by these startups?" I believe the median size is <10 employees[2]. If you dumped 10,000 employees onto the market in the Bay Area it would probably sort out reasonably quickly.

I'm still stuck trying to figure out if this is really just a capital excess or a bubble though.

[1] http://blog.mpettis.com/2014/09/not-with-a-bank-but-a-whimpe...

[2] Hard to get precise numbers but you can troll around Crunchbase and other 'tracking' sites and get an idea on the size for "Smaller Younger startups" which is what this question referred to.

> I enjoyed reading Michael Pettis' blog entry[1] about excess capital, which provided an alternative narrative to the rise in equities but it wasn't really a bubble so much as it was just an excess of capital.

You seem to be splitting hairs. From your referenced blog post:

   Washington is absolutely correct, in my opinion, to want to boost American consumption, but the Fed seems to be trying to boost consumption by igniting another asset bubble in the hopes that, like before 2007, Americans will feel “richer” and so will consume more. This isn’t sustainable, however, and will leave us, as Paul and Druckenmiller fear, even more heavily indebted and more dangerously exposed to the underlying weakness in demand.

But to answer your question: the strong public equities market has provided investors with the capital and confidence to plow money into investments in private tech companies.

> If you dumped 10,000 employees onto the market in the Bay Area it would probably sort out reasonably quickly.

Even if we assume that we're looking at just 10,000 people, your assumption that the market will quickly absorb them without much pain is quite optimistic.

Companies like Google and Facebook will certainly pick up some of the most skilled folks, but the vast majority of startup employees are not as desirable as many would like to believe, and they won't be able to replace their salaries.

Put simply, there are 20-something [insert programming language du jour] developers with a few years of experience making $120,000/year plus benefits at unprofitable angel or venture-backed startups who are going to have to face the reality that their six-figure earning potential is completely dependent on the continued inflow of investment dollars to early-stage startups.

That sounds possible. but new doesn't necessarily mean unstable. private equity is big because of the concentrated wealth of this decade.

Well, one thing about 1999 is where the actual revenue for the big players was coming from. That is, when Yahoo reporting their income what % just came from startups spending VC money without a business plan?

The whole dot-com thing in 99 was pretty much a pyramid scheme, where the first players showed there was promise, then when everyone rushed in with their VC money to spend, they looked solid. When the leaf nodes ran out of VC money though, everything dried up. And that hit not just Yahoo, but software/hardware vendors, and just about everyone else.

What could be dangerous now, is how much of Google's and/or Facebook's money is advertisers who are selling goods/services, or Advertisers wanting traffic for their ads.

Facebook seems to have a lot of ads from Answers.com, which is ad driven itself. Pretty much every mobile ad I get is an add for either Google or a different mobile product. I would say the whole 'freemium' game thing has put a lucrative revenue model to those eyeballs, but how much of that is a fad?

If those advertisers disappear, how badly will Facebook's revenue or Google's mobile revenue be affected?

There is some of that. but for the most part (1) advertising revenues come from across industries, (2) startup revenues as a whole are fairly diverse coming from advertising, saas, transaction fees on rooms or rides and (3) most importantly I don't think Dropbox's value will hit critical levels because twitter's business model fails. its all a lot less speculative. multiples are high, but not the imaginary. most of the mature 2.0 startups are real businesses with a company value derived from revenue and profit.

Theory: Wallstreet has limited other domestic outlets for their investment money since the 2008 crash, and is therefore investing heavily in tech. This will continue until either 1) more sectors of the economy recover present new and/or better investment opportunities or 2) a crash occurs. However, in the case of #2, which everyone fears, unless the conditions change and wall street gets a new location to place their money, tech will still be one of the best domestic investment opportunities, and we'll see a new climb in spending after said crash.

That's my 2 cent theory, I'd love to hear some discussion on it.

Both will happen. A sudden withdrawal of cash from tech will manifest with developing companies (a lot of them) not making payroll, a sudden rout of closures, causing more money to flee tech because it now looks like it's crashing etc...

My theory is similar. We are in a "rise-all-boats" bull run thanks to the injection of cash into the economy from the Fed. The few "Buffet-like" value investment managers are saying there isn't much margin-of-safety in valuations any more. Also, other than tech, other sectors of the economy are "easy" to price. We pretty much know the growth of a utility company, real estate company, etc is going to be. They can only grow so fast, and the market guess within certain tolerances what it will be.

On the other hand, tech is one of those fairy land sectors that is not priced on any reasonable metric (profits), but instead on hopes and dreams. Until all tech becomes priced based on profits (like Apple, IBM, Google, etc) it will continue to see large investments seeking outlandish returns. Right now it's an area where getting market share from others can happen quickly.

It's pretty hard to grab market share from a utility (usually regulated monopoly) or a rent seeker (you need to buy the asset to rent it out yourself). Same goes for other sectors, only so many cars can be bought every year for example.

Snagging eyeballs can happen quickly, can be fleeting (myspace) or more long-lasting (facebook). Hence the WhatsApp stuff (OMG, so many eyeballs there, just like facebook!!!).

"or a rent seeker (you need to buy the asset to rent it out yourself)"

"Rent seeking" is a different thing than "renting out access to an asset".

http://en.wikipedia.org/wiki/Rent-seeking

The question here is over what timescale would you expect to see the new climb? Isn't what you're really describing is just boom and bust which is pretty much business as usual, but you seem to be implying that it might just recover faster.

But if that's true (I can sort of see the logic - essentially that Wall St won't learn it's lesson for which there is some evidence) doesn't it also follow that the next bust would just come faster? If the crash is really just what happens when the valuations defy reality then if the money comes rushing back faster, wouldn't that just come about again faster?

That's pretty much it, isn't it? They pick something to start throwing money at until it explodes and destroys half the economy, and then they move onto the next thing. They're still doing real-estate here in Canada.

When will we see a "Western heavy industry" bubble?

The western heavy industry bubble happened in the 1840s. And before, and after. A financial bubble looks a lot like the "hype cycle" for new tech - it's hyped up somewhere beyond its actual value, then crashes to below its "true" value, then recovers and becomes something actually useful. It happens to every new industry, or when circumstances change.

There are signs the financial industry is running out of targets though (equities trading was pretty much commoditized decades ago, corporate bonds happened in the '80s, we've just seen the boom and bust for sovereign bonds and asset-backed securities. There's a little bit of interesting stuff going on in commodities and forex, but by and large all this money is sloshing around with nowhere to really go for returns), and the industry itself is shrinking. If anything we may have seen a finance bubble too.

On a macro level, a likely hypothesis for this trend is that there is nothing better to invest in than tech. But tech isn't moving fast enough (value is hard to create, not in a gold rush period), so we try to translate money into growth much more. Because otherwise that money's just sitting around!

In an ideal world that money might somehow be invested in long-term societal growth than can yield high tech growth in the future, like education, or maybe investing in individuals for some long-term return on their income. More R&D at all levels. Just random ideas. Point is, it'd be nice to see some creative thinking with investment money rather than see it pumped into companies trying to sabotage each other's ride sharing apps, or out-sell their fundamentally identical crm services, etc.

> On a macro level, a likely hypothesis for this trend is that there is nothing better to invest in than tech.

I think folks are missing a bigger part of the macro picture: It is not just tech. Low interest rates and easy monetary policy have inflated many types of assets.

By way of example, this is currently headlining on Yahoo Finance: http://finance.yahoo.com/news/some-powerful-voices-add-to-fe...

I actually threw together some very lazy (just trying to do a little something every day) graphs on VC yesterday[1] if you want to see the dot-com bubble in terms of VC disbursements and number of deals. Both the old bubble and the recession are extremely visible. It'll be interesting to see what these graphs look like in a couple years when reporting catches up to 2013-2014.

[1] http://btus.us/venture-capital-in-the-united-states-1998-201...

I have a hard time even reading any of these pieces where a VC is complaining about high burn rates / valuations all while continuing to invest.

"Because my competition will continue to invest" is not a good reason.

You don't see Warren Buffet investing at valuations he believes are untenable, just because the market happens to be up.

That's what happens when you're an investment manager. You're paid to do something, anything. If you just sit on cash, your investors aren't going to keep paying your fees.

Sure it is. VCs aren't the money guys, they just invest the funds of the money guys. Not investing really isn't an option for them.

VC's are paid to invest intelligently and get a return.

But they have a conflict of interest because unless they invest, they don't get paid.

That's for the carry. If the market crashes and their investments fail, their carry income will be zero anyway.

VC's do get paid even if they don't invest via their management fee. It's certainly enough for them to live comfortably on while investing the fund over a ten year cycle.

But, to your point, there's another dynamic here: if they don't invest (and thus have no carry), they will be less likely to be able to raise future funds.

Just saying that it's not as simple as saying there's a conflict of interest. VC's do have a fiduciary duty to their investors and their income is tied, at least in part, to their ability to make money. Even if they lose all of the money, there is no direct cost except for possibly a quite substantial lost of reputation.

The risk to entrepreneurs is not symmetrical. No guaranteed salary is available to entrepreneurs. Even if a portfolio company fails, VC's still receive a management fee.

This system works surprisingly well, except when VC's are stupid or screw entrepreneurs. It's actually pretty amazing that it works at all, since really the middlemen hold most of the power as the distributors, but not originators, of the capital.

I've discussed this at length with investors, entrepreneurs, and upper level management at large tech service agencies, and I'm not convinced that there is necessarily a bubble this time around. Accounting for the massive increase in bandwidth, CPU, GPU, smartphone ownership, software development practices, AI logic, and reliance on data compared to that of 1999, it's really a flawed model to draw 1:1 parallels in my opinion.

While there will be a shift at some point away from software/web entities and into manufacturing (to catch up meatspace to webspace), it will be these tech entities that will largely lead the charge, to enhance their own offerings. The example put forth in the article is as flawed as the logic it purports to criticize: "SAYING WE’RE NOT IN A BUBBLE BECAUSE IT’S NOT AS HIGH AS 1999 IS LIKE SAYING THAT KIM-JONG-UN IS NOT EVIL BECAUSE HE’S NOT HITLER."

Compared to 1999, the value drawn from these companies inside the "bubble" doesn't even remotely exist within the same qualitative and associative parameters.

If you think too much money is bad, wait till you see what not enough money looks like.

Looking strictly at numbers in this situation is a bit like forgetting to account the inflation difference between 1800 and 2014. Of course the amount of money being invested in tech has grown enormously; in 1999 everyone didn't walk around with the internet in their pocket.

And now everyone is walking around with the internet in their pocket, yet revenue seems elusive to a lot of very highly-valued companies.

Lack of potential users is no longer an excuse, but we're still throwing billions at companies with no revenue model, and billions at companies with a revenue model but unable to get cashflow positive to save their lives.

>>>>In the same way, Gurley said, too much cash in the startup economy means weaker companies can survive without having to generate cash for themselves.

Isn't this how business should work? Weaker companies lose and the stronger companies win? Those with good business plans, good marketing strategies and a solid product should be able to weather a crash.

Also, those companies that actively plan for a crash usually do much better. Saving money, having a plan B in place and assuming its going to happen is a lot smarter than simply believing we're not in some kind of bubble and then losing everything when the market eventually corrects itself.

In the summary, “At some point you have to build a real business, generate real profits, sustain the company without the largess of investor’s capital,” Wilson said, “and start producing value the old fashioned way.”

I do believe a significantly higher proportion of companies today are doing exactly that, and are quite focused on it, whereas they were not in 1999. That's a general and very un-scientific argument for why this bubble (which it still surely is) is not as bad.

Sure, some companies have shaky monetization strategies; but you just can't say companies like Uber are not producing value (rumors of ~$10 billion gross revenue).

People seem to have completely forgotten how completely nonsensical (and often completely clueless about tech, the internet and business) tech start-ups were in 1999 compared to now.

The valuations and burn rate may be too high and up for a big correction, but most of the start-ups these days at least have some logic behind it by which they may be seen as potential hits. 1999 was largely mass hysteria with no foundation in reality whatsoever.

It's not a bubble, but a blister. Lance it and it fills back up again.

Although the economy suffered a hit, does anyone remember what the job market was like for programmers after the boom? If this article is right (which I'm not convinced of), even to a smaller extent -- how do you think that will impact the current job market?

Has anyone here personally lived, worked, and saw the dot com boom and bust in Silicon Valley? More so, do you happen to currently live and work here still?

I have, and although I don't think the current tech boom is as bubbly as the late 90's, I do see a lot of similarities in the area. Traffic, though, is no where near as bad as it was back then. But, it's getting there. However, construction is at an all time boom. I have never seen more cranes nor construction in SF ever. I think we are back to heady times, and I would be really cautious as an investor in the next 2 years.

It's easy to chalk this up to herd behavior but what's scarier is the real possibility that solid investment choices don't really exist in America anymore.

After trying to figure out if he was actually going to back up his argument anywhere - at some point I realized he was essentially saying that Uber is not different than Pets.com and stopped caring about the article.

It's at least the third article that spun off from the WSJ article (if not even an older article/interview).

was there a HN submission of that article?

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