Well that all depends on how long Yellen runs the QE 'infinity' program.
So long as money remains this cheap, the stock market will keep expanding until there's a necessary crash. Money is chasing risk, inflating assets accordingly.
The last few quarters have delivered the first indications, in my opinion, of a repeat of the excesses of the 1990s. The higher this stock market goes without fundamentals directly supporting it, the more frothy parts of the tech sector are likely to get.
Over 90% of the gains in the broad stock market the last two years have been from pure multiple expansion. Another year of this and it will be a full blown bubble across the board, and by that point what will Snapchat (or the next craze) be worth? $8 billion? $20 billion? The only thing left at that point will be a massive implosion on the other side.
Where are stocks like LinkedIn going from here? $50 billion (50 times sales)? Is Twitter worth $40 billion (70 times sales)? Is Tesla worth $30 billion? Is Netflix worth $35 billion? Is Amazon worth more than Walmart? Should Google have a 40 pe ratio, while growing earnings at 10-12%?
I say the party is nearly over, there's no upside left looking out several years that doesn't require a bubble.
> If you honestly think the current Silicon Valley looks anything like 1999, you don't understand what happened in 1999.
When you chew gum, you don't blow the exact same bubble every time, do you? Some are bigger, some are smaller. Some pop sooner, some last longer. Some make more of a mess when they pop, some make less of a mess when they pop.
I participated in the tail end of the first bubble, and while there are absolutely differences, some meaningful, I think it takes some effort to ignore the many meaningful similarities.
That's presuming this is a "bubble" at all. It's not; the data doesn't support what you're proposing. That, or every time any single ridiculous transaction (or rejection) happens, we have to call it a bubble.
Let's get serious here. SnapChat refusing $3 billion, while ridiculous, does not at all compare to the masses of VC cash going to thousands of companies with no idea about how they were going to make money at all.
If you must compare them, compare them by scale. Today, we have a small handful of companies getting a lot of attention because of questionable financial dealings (whether it be IPO or the refusal of cash).
In the '90s, the differences were much larger (presumption that putting "Internet" in front of any business idea would automatically mean IPO and great riches), and the number of businesses involved was much larger.
That is why there is no bubble. When there is an actual bubble, I'll be more than happy to call it out.
Some are bigger, some are smaller.
To qualify as a "bubble," doesn't it have to involve a large segment of the industry, not just a handful of companies?
If you honestly think the current Silicon Valley looks anything like 1999, you don't understand what happened in 1999.