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Dot-Com Bubble v2.0?
Posted by
Cliff
on Wed Oct 18, 2006 06:38 PM
from the oh-no-not-again dept.
from the oh-no-not-again dept.
eldavojohn wonders: "With the recent acquisition of YouTube by Google, there has been a lot of speculation (on both Slashdot & The Toronto Star) that we are nearing the second economic bubble created largely in part by growth in the digital sector. While one may be able to debate that the revenue from advertising and sales can indeed back this growth, are we headed towards the second bubble and, if so, how hard is it going to pop? Keep in mind that popular voodoo economic theory has attributed the first bubble phenomenon to 'a combination of rapidly increasing stock prices, individual speculation in stocks, and widely available venture capital.' I think we're experiencing all those, although it is not as flagrant as it was during the first bubble. What do you think?"
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OMG! v2.0 (Score:4, Funny)
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I bought a rather nice chair for around a $100 nearly four years ago. It's still in great shape and still as comfy as ever.
I had to look around for one that was built nicely *roomy too*, but it was worth the time and testing.
Anyhow, sure you could blow $500 on a good chair or put in some diligence and save a good bit.
/. is really more of an Alice in Chains crowd: (Score:3, Funny)
Sitting On An Angry Chair
Angry Walls That Steal The Air
Stomach Hurts And I Don't Care
What Do I See Across The Way
See Myself Molded In Clay
Stares At Me, Yeah I'm Afraid
Changing The Shape Of His Face
Candles Red I Have A Pair
Shadows Dancing Everywhere
Burning On The Angry Chair
Little Boy Made A Mistake
Pink Cloud Has Now Turned To Grey
All That I Want Is To Play
Get On Your Knees, Time To Pray Boy
I Don't Mind, Yeah
I Dont Mind, I-I-I
Lost My Mind, Yeah
But
Re:OMG! v2.0 (Score:4, Interesting)
That very winter, I came back to to a project for them, only to find a cheap POS "executive office chair" at my desk. Yes, it was leather; yes, it was very flashy looking and fit well with my pressboard laminate desk -- but it wasn't very comfortable to sit in.
After four weeks of working 12-16 hours a day sitting in that damned chair (what, I didn't mention this was a tech job?) my spine was twisted in knots, my neck ached constantly, and my elbows hurt persistently. My productivity dropped essentially to 0, I had to see a chiropractor on a weekly basis and I chose to work from a noisy dorm room most of the time rather than deal with that chair.
Eventually, I took up the issue with the HR department who instantly caved and gave me back my fancy Steelcase chair. To them, $800 is a huge bargain when you consider the cost of disability payments, surgery to alleviate carpal tunnel synrome, etc.
I've had that chair for four years running now; I don't work quite as hard now as I did that first winter, but I haven't had a single back complaint, I'm free of carpal tunnel syndrome despite being a constant keyboard user, and I'm rarely the worse for wear despite spending all day in this chair, five days a week.
As a software developer, your chair, desk, keyboard and mouse are the physical tools of your trade. A carpenter doesn't skimp on his hammer; an assassin doesn't carry around a water gun. Why should *you* suffer with inferior tools?
Parent
Taco's Evaluation (Score:3)
Does anyone know if any of the slashdot ownership was realized as cold, hard cash or did it all go down the pipes and stay there?
I'm waiting for the third bubble, myself.
Re:Taco's Evaluation (Score:5, Insightful)
If tech stocks are overvalued now, it's nothing like they were then. Now let's talk about housing [cepr.net], shall we?
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Starting to mimic other economic systems (Score:4, Insightful)
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Anybody know of a stock trading BBS based on slashcode? In such a database may be a solution....
Economic Growth (Score:2, Insightful)
The economy is on the upswing, and people (perhaps minus slashdotters) are generally optimistic.
It is very possible to have ecenomic growth without a hyperinflated economy resulting in the proverbial bubble. After the economic growth will be a time of economic slowing and finally a recession of the economy.
You can count on it, although unfortunately you can't set your watch by it. Timing of the whole thing is still not very prec
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A recession to me indicates a failure of the market to correctly predict fair prices, in other words, hyperinflation. So what's the difference between economic growth and a bubble? And is the optimism ever really justified in the long run, or are we always fated to have hyperinflationary markets
Re:Economic Growth (Score:5, Insightful)
First off, the economy is not on the upswing. While we don't seem to have another dot.com bubble, we absolutely have a housing bubble and that is worse! If your stock tanks, you still aren't making monthly payments on it and it's a lot more liquid. The record low savings rates and record high debt rates are not symptoms of a healthy economy. Neither is the account deficit over 6%. So far the US is the only country in history to have that high of an account deficit and not have a currency collapse. The fact that it is increasing rapidly is not good. (BTW, I know it's political season, so let me just say it's not Bush's fault, but structural - for people who think I'm bashing Bush)
Not in the US, not since 1911, the year of the federal reserve act. You can't keep printing up money and loaning it into the economy and expect nothing bad to happen. In fact, the efficiency of the information age means that when the money passes thru, that adjustment will be far more extreme, not less extreme. The worst part is that the Fed thinks they have lernt the lesson of the great depression - that the solution is more liquidity. No it's not! It will just change it from a great depression to a hyperinflationary great depression. I don't think people have any idea what they're in for.
Why is everyone so sureal. Any look at the numbers is just terrible, do people understand that the dollar can't make it as a global reserve currency for more than a few more years and likely can't make it as a currency at all within the next decade? Can your family afford a debt of about 480K that is increasing at the rate of about 30K per year? Well, between all the obligations and systemic debt it already must.
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Re:Economic Growth (Score:5, Interesting)
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Happens All The Time (Score:5, Insightful)
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"Not a huge deal"? (Score:5, Insightful)
The fact is the first dot com bubble burst wasn't that big of a deal. It's not like we had soup lines.
Wow, talk about revisionism. The first bubble burst was HUGE deal; dozens of major banks grossly violated their 'chinese wall' policies while underwriting the IPOs of clients and looked the other way when internet companies were engaging the shadiest accounting practices known to man. Companies swapped "shares" and both counted it as revenue based on projected stock prices, for example. Tens if not hundreds of thousands of people lost their jobs in "layoffs", and it had a massive ripple effect in places like SF. The crash and delisting of hundreds of "internet" companies destroyed "investor confidence" on the stock market, and affected all manner of investors, from individuals to massive retirement accounts.
Christ, man! It was enough to destroy Arthur Anderson Consulting. Why do you think they're known as Accenture now? Having your top officers lambasted by Congressional investigators for conspiracy, fraud, etc on national TV doesn't exactly bolster confidence in a business where clients are trusting you...
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Christ, man! It was enough to destroy Arthur Anderson Consulting. Why do you think they're known as Accenture now?
Funny, I thought it was Andersen (busload of kiddies) that named itself Accenture.
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Back in 1997 if you had told me that big and bad US West would be bought out in a few years by the tiny little 1 year old company down the street, Qwest, I would have laughed you out of my office
But then Qwest made a bunch of money during the bubble and took US West by force in one of the decade's most unanticipated and disconcerting hostile takeovers.
This doesn't prove that the bubble was deleterious, and correcting the market certainly isn't a deleterious effect,
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What is the Metric? (Score:2, Insightful)
I think... (Score:2)
In other words, you need a product (*bang* no more Pets.com), you need a business plan (*bang* no more SimDesk), and you need an idea that isn't terrible from the outset (*bang* there goes "MyLackey.com").
During the first bubble (Score:4, Informative)
During the first bubble the hubris was so thick in the Silicon Valley air you could feel it. People around you virtually hummed with it. And like The Emperor's New Clothes, if you actually looked at some of the shiny bits you'd notice some what people where trying to sell was utter shite, a scam, not worth a penny, yet people bought their stock on IPO and it all went nuts. There was 'the big strategy', to develope something Microsoft, Oracle or Cisco didn't have and would want and to trumpet it all over the place and hope one of these big companies would make you an instant millionaire by buying you out. Didn't always work.
Now I think most of what is going on in this bubble actually cuts the mustard in the ledgers. It pretty much has to. Too many (ad)venture capitalists got burned and they're a bit more careful now.
This time it's all "private money" (Score:5, Interesting)
Last time, it was mostly companies going public. This time, it's companies heavily funded with venture capital, and the companies are then bought by other companies.
But it's definitely a bubble. Way too many companies are chasing the same pool of advertising money.
And, unlike Bubble 1.0, most of these new companies don't really do very much. Or even stuff that hasn't been done before.
As I wrote in another article, "social networking" sites have a life cycle. EZboard peaked mid 2003. Nerve peaked early 2002. Bondage.com peaked mid-2003. Tribe peaked early 2006. Xianz (the "Christian Myspace") peaked in spring 2006. Friendster peaked twice, once in late 2005 and again in mid-2006, but that's an unusual pattern. Usually, once they peak, it's downhill after that. Myspace has flattened and looks like it's about to peak. This works just like nightclubs; they become hot, they grow, they get too popular, they get overrun, they decline, they hang on, but nobody cares.
YouTube is terribly vunerable to the RIAA. Once somebody builds a tool to check audio on YouTube against RIAA licensed material, they're going to get notice-and-takedown orders by the ton.
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Re: the nightclub analogy (Score:2)
Another one has changed names and themes every couple years, when the old one got too "dull" and "passe".
I
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re-inventing them every so often.
Area, the hottest nightclub in NYC for part of the 1980s, did a complete redecoration and theme change every six weeks. That kept it a hot club for years.
But redesigning a web site doesn't have the same effect. Tribe just did that. (New! Web 2.0! Now you can rearrange your home page!) One of most active tribes is now "Tribe.net bug reports". Oops.
No bubble (Score:3, Interesting)
People in the Bay Area say there *was* a bubble (Score:3, Informative)
There was no dotcom bubble and there won't be a new one.
There was a tremendous bubble. I was there. I did work for companies that were almost entirely virtual. There was no "there" there. It was all hot air. I know plenty of people who suddenly had fantastic jobs and were living a lavish lifestyle, only to be out on the street looking for a job when the boom dropped on the bubble. Bay Area traffic noticeably thinned for at least two or three years. It definitely was a bubble, and when it popped, the eff
Self-fulfilling prophecies (Score:5, Insightful)
We are straight in it (Score:4, Interesting)
Frictionless environment (Score:5, Insightful)
The "digital marketplace" is fundamentally different than the standard "meatspace" environment. In cyberspace, product carries no mass. In many cases, intellectual property is "production grade" the moment it's written. EG: PHP code. There's no duplication cost, virtually non-existent distribution cost, and the result can be seen/used by millions overnight, if you have some servers to handle it.
Note: the servers to handle "millions" can be surprisingly cheap, and getting cheaper every day
So, while it takes an auto company years, and eleventy billion dollars to come out with a new line of cars, it takes maybe 2-5 guys consisting of a decent programmer, a few salespeople, and a book-keeper armed with a few thousand bux to develop a product usable by millions, even if they are working day jobs to pay rent.
So this means that the boom/bust cycle can happen in 2-3 years rather than 2-3 decades.
Get used to it - it's only going to accelerate from here. Ever heard of the technology singularity? [wikipedia.org]
It's coming.
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You are dead wrong, but you aren't going to believe otherwise until you get burned. The optimism of youth may cost you a month of no sleep; maybe it will cost you your first mortgage.
The only way to tell is when, five years down the road, you reread what you wrote and find yourself laughing...or crying.
Yes (Score:2)
Baby Boomers (Score:5, Insightful)
Just because the dot-com bubble popped didn't cause these people to stop trying to squirrel money away for retirement. And since they never really saved the way they should, they're trying to make up for lost time by speculating in stocks. So the irrational exhuberance continues. Eventually, though, it will stop. And when it stops, the bubble will collapse in a very very big way.
The fallout will involve all these folks whining about how the next generation should pump more money into SS so they can afford the affluent lifestyle to which they've grown accustomed. Screw 'em. The most irresponsible generation decided to give their life savings to the pinstriped crooks on Wall Street. That's their problem, not mine.
Baby boomers are the big white elephant in the room that everyone pretends they can't see. Instead we have to endure all manner of ridiculous handwaving BS about new economies yada yada yada. Phghght. What a bunch of crap.
As an investor who's been in many IPOs (Score:2, Interesting)
However, the problem is that the market has no useful mechanisms to properly evaluate the true worth of future technologies.
They could be insanely great - legendary.
Or they could be really lame.
So, trying to predict future cash flow and growth at the beginning of a company with a new technology is mostly a crap shoot.
One good rule is - don't buy into a rise. It's better to put most of your money in an index fund (Euro stocks mix with
It's in medical (Score:2)
It's the medical industry right now. It's the thing to do if you're going to college. Become a pharmacist, x-ray or ultra sound tech or some other skilled position in a hospital and earn a very healthy living.
Of course, medical software is a huge industry right now as well.
But basically with the supply of old people getting larger and larger it makes sense that the medical industry is really in a boom right now.
H
Can't wait (Score:4, Insightful)
As for tech, quit cock-teasing us and put together a phone with wireless internet, camera, mp3 player, video player, video recorder, gps, and 3d gaming. Get rid of the psp, gameboy, DS, ipod, palm, blackberry, blueberry, boysenberry, and so on.
A bubble burst only effects the crappy businesses who use copycat ideas and whose only purpose was to make a quick buck. Good-bye and good riddence.
Hmmm, is any of this borne out by facts? (Score:2)
1. Where are the "rapidly increasing stock prices"? Look at practically any
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http://videodownloader.net/ [videodownloader.net]
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Unless you're a sharp day-trader (evil grin).