

There is No Bubble, There is Entrepreneur Envy - gatsby
http://howardlindzon.com/there-is-no-bubble-there-is-entrepreneur-envy/

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hncommenter13
I disagree.

1\. I can think of many bubbles that the author has lived through, even if he
can't. Oklahoma natural gas in the early 1980s, junk bond credit bubble in the
mid 1980s, Japanese stock and property markets in the late 1980s, regionalized
housing bubbles in California and Boston in the 1970s and 1980s, etc. There
are many other examples, depending on how old he is (Nifty 50 in the late
1960s), etc. And I don't think it's a stretch to call the "mania" for tech
stocks in 1999 a bubble. (If that's not, why is housing/credit in the 2000's a
bubble?) Ignorance of history is not generally a qualification to opine on it.

2\. To take this seriously as comment, he'd need to define the difference
between a bubble, a mania, and a phenomenon, at least well enough for someone
else to apply it to a situation and arrive at the same classification.
Otherwise, this is an article about how he doesn't think there's a bubble, so
you shouldn't either.

3\. I will do him one better and hazard at least a partial definition of a
bubble--a rapid and escalating series of price increases that is driven by a
feedback loop of public perception rather than by the fundamental cash flows
of the asset. One can quibble with this (it's hardly scientific). If you don't
like mine, have a look at Robert Shiller's
([http://dealbook.nytimes.com/2010/01/27/schillers-list-how-
to...](http://dealbook.nytimes.com/2010/01/27/schillers-list-how-to-diagnose-
the-next-bubble/)).

4\. To establish that this is not a bubble, he would need to make it clear why
he believes that the cash flows the affected firms will ultimately generate
will make their present valuations reasonable. While that may be true in some
cases, in general I don't think it's a hard case to make that the tech
industry has jumped from cyclical upswing to nascent bubble. Pockets of tech
financing--arguably angel financing and some late-stage financing--are, to my
eyes, pretty much already there.

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wccrawford
"We had ONE bubble in my lifetime and it was a ‘credit bubble’."

In other words, he has redefined bubble to mean what he wants so that all the
other bubbles aren't really bubbles and he can make a link-bait headline.

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mcphilip
I found this particular article vague and lacking of any necessary supporting
facts. I read through a few other posts by the author and found them along the
same lines [1,2]. I see no reason to value anything written by Mr Lindzon on
the serious subject of whether we are in a bubble.

[1] [http://howardlindzon.com/apple-and-bank-of-america-i-love-
wh...](http://howardlindzon.com/apple-and-bank-of-america-i-love-when-the-
market-makes-sense/)

[2] [http://howardlindzon.com/the-cotton-crash-the-q-tip-bear-
mar...](http://howardlindzon.com/the-cotton-crash-the-q-tip-bear-market-
of-2011/)

------
n_coats
I actually agree with this.. I tried to think back about the dot.com era
(which some people refer to as a bubble. If you think about it, the dot com
bubble never burst. It is still alive and if anything, has allowed the amazing
platforms we have today to materialize from something. Perhaps the insane
growth has somewhat mellowed, but the dot.com era never blew up (destruction
blow up, not growth haha). The dot.com era and our current
entrepreneurial/start up era are unique, but I still think they play by the
similar rules that any business, product or service goes by. They'll be
created, experience growth, begin to mature and then possibly (with no regard
to adaptation) decline or slowly die out. It's up the people behind the
companies how long it takes and how much traction they can establish in each
phase, which is where the true entrepreneurial skills shine.

Just a few points that come to mind after this article, not saying they're
right or wrong.. but thanks for getting the mind cranking!

~~~
raffaelc
"If you think about it, the dot com bubble never burst."

the NASDAQ went from over 5000 to under 2000. how can this be characterized as
anything other than a bubble bursting?

~~~
n_coats
You're right, market values dramatically declined.. but you have to include
other variables such as 9/11. The market was its worst in 2002 and one would
have to think that without the repercussions on the market from 9/11, things
wouldn't have been nearly as bad. The market went on to rebound and soar very
high for the next 5 or so years and then our current situation began.

Case and point, the dot.com era experienced a decline in product life cycle
growth as it transitioned from its growth to maturity stage (and of course,
the events that took place on September 11th didn't help either).

