Over 12,000 views and 64 comments later, the consensus in this Branch thread is that we’re not in a “bubble”. Maybe the “bubble” side wasn’t fairly represented fairly, or maybe we’re just really not in a bubble.
The one thing we all know for certain: more “bubble” posts are coming our way. No one, it seems, can help themselves. You can be wrong a million times, you just have to be right once. Everyone wants to be the one to “call it”.
Earlier, First Round Capital’s Josh Kopelman tweeted out a link to a post he wrote, rounding up “bubble” posts. It’s even funnier when you realize when he wrote it: 2007. And he has “bubble” talk going back to 2004. The best line comes from 2006:
I read that whole post and the pro-bubble side wasn’t even close to being represented. We were in a bubble in 2006 too. It’s hardly tech’s doing that the rest of the market collapsed in 2006, and had it not, I’d wager things would be very, very different now. There were a disturbing number of faulty arguments in that thread. The most egregious is the pseudo-use of P/E ratios, while studiously ignoring the vast majority of tech companies who have no earnings and, thus, have P/E ratios that are effectively infinite (of course, a developer would take umbrage with that and point out that their P/E ratios are NaN, but most of them have at least a penny of income).
Sox is being weakened. If you’re in NY and hang out with hedgies, you absolutely know that more “dumb” money is going into tech. Bubbles happen in all markets, not just public ones, so selectively using P/E ratios from public tech companies only is an irrelevant metric. The IPO market is irrelevant - it’s weaknesses are based on the economy as a whole, and not tech. Tech is actually outperforming the rest of the IPO market.
Anyone who thinks we’re not in a bubble answer this: what’s going to happen when the REST of the economy rebounds?