No one really knows if there's a bubble before it bursts. They are easier to see in hindsight.
On the one hand everyone in the world is getting a smartphone since the pricing for chips has come down so much this year. That will make the market for mobile computing/commerce/you-name-it huge.
On the other hand, Facebook hasn't really nailed their business model. Yes, it's pulling in a lot of cash, but not enough to justify its valuation. Assume Facebook IPOs in 2012 and because everyone except newborns is on the network, the price gets bid sky-high, but they fail to grow revenue. Investors get scared and pull out and take the rest of the tech market with it. Then Facebook grows credits to the be the biggest payment platform in the world and the whole market goes up again.
Like PG said, market valuations are a sine wave. They are educated guesses, no one knows anything for sure.
No one really knows if there's a bubble before it bursts
This is commonly quoted but not true. Everyone who had any clue saw the housing bubble collapse coming a mile away. I was warning friends buying houses in 2006 that they were buying at the peak of a bubble. And everyone on Wall St knew exactly what was coming down the pipe.
You have a point, but no one knew when it was coming (hence why I said you can only see bubbles in hindsight). I should rephrase and specify that no one can tell when a bubble will burst. And as long as a bubble keeps growing, you can still make money buying into it.
On the one hand everyone in the world is getting a smartphone since the pricing for chips has come down so much this year. That will make the market for mobile computing/commerce/you-name-it huge.
On the other hand, Facebook hasn't really nailed their business model. Yes, it's pulling in a lot of cash, but not enough to justify its valuation. Assume Facebook IPOs in 2012 and because everyone except newborns is on the network, the price gets bid sky-high, but they fail to grow revenue. Investors get scared and pull out and take the rest of the tech market with it. Then Facebook grows credits to the be the biggest payment platform in the world and the whole market goes up again.
Like PG said, market valuations are a sine wave. They are educated guesses, no one knows anything for sure.
Here's more on Facebook's valuation: http://community.nasdaq.com/News/2011-03/how-to-justify-face...