Misconceptions About Bubbles

There are people in the tech community who think that me writing this post means that there is no "bubble". They think that by definition, a bubble is a psychological phenomenon that can only occur when people are so caught up in a massive upswing that they don’t realize the gap between value and prices. I’m not advocating that there is a bubble - I haven’t looked at enough data to make an educated assessment of the market. But I will say that words are just words. The psychology of a bubble is only important insofar as it influences people’s actions. The fact that people are talking bubble is irrelevant if investors aren’t adjusting their strategies and behavior. People are still spending without apprehension, throwing money at whatever the next hot startup is. Prices are rising and billion dollar valuations seem to be happening weekly. (Source)

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Posted: June 29th, 2011
at 10:00am by mnp


Categories: business

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