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Comment by IgorPartola | Hacker News Reader

Yes, but wouldn't you agree that the high profile valuations are over way over the top? Facebook, Instagram, Twitter, WhatsApp, etc. were/are valued extremely highly, I would say unjustifiably so. If there was a mechanism to go long against them and I had money to gamble with, I would.

My go to example for this is Facebook's IPO. Their valuation was at the time at $50/user. Can they extract that much lifetime value out of every user they have? It seems rather high to me.

I don't believe there is an industry-wide bubble going on. But it seems to me that if you hit the right keywords (social, sharing, advertising), you will be valued at the top of the range, not the bottom. Moreover, I believe these particular valuations will get market corrected sooner or later.

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Selling Facebook's stock short would indeed let you bet against the valuation of the Facebook platform, Instagram, and WhatsApp. Keep in mind that markets may be able to stay irrational longer than you can stay solvent.

What I'm talking about is holding a long term investment against FB. I don't think they'll go bust tomorrow, but I am willing to bet some amount of money their shares will go down sometime between 2-5 years from now.

There are exchange traded funds (ETFs) that short. You can probably find one for the technology sector. You'll probably have to short Intel along with Facebook, but that's the safest way to do it I can think of.

It's almost as if the markets are intentionally structured such that it's easy to place a long-term bet that asset prices will rise, but relatively more difficult to bet the converse :0

You can always buy long-term put options. The premium is high, because of the time range.

That's exactly what I mean by "relatively more difficult."

There is no premium if you buy and hold, in fact that's the baseline situation from which the premium is calculated. And buy-and-hold works for arbitrary timescales, while even long term puts come only in certain flavors.

That starts to seem a lot like structurally built-in upward pressure on prices.

For $12 you can buy a put at FB's current price ($85) for Jan 2017.

But FB has real profits, so you may not wanna bet too much against them. They're also locking up users' Internet access in many markets, making it literally impossible to run a competitor (without negotiating the same ISP access).

Perhaps look at Splunk, which does great not only in losing money, but accelerating those losses. (Er, I mean, they "focus on top-line growth".) But hey, maybe they can cut their costs by over 2 (eliminating all R&D wouldn't be enough) but keep the revenue coming in. Then they could be profitable before other systems and hardware catch up. They're only 12 years old, so it's still very early in their long-term story.

I really enjoyed this comment. Thanks. Yeah, I was thinking of the put options. Now I just need that spare money I can gamble with and I am all set.

FB has put options listed for Jan 2017, that's nearly two years.

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