Mark Cuban: Tech Bubble 2015 Worse Now than in 1999

In a bubble there is always someone with a “great” idea pitching an investor the dream of a billion dollar payout with a comparison to an existing success story. In the tech bubble it was Broadcast.com, AOL, Netscape, etc. Today its, Uber, Twitter, Facebook, etc.

To the investor, its the hope of a huge payout. But there is one critical difference. Back then the companies the general public was investing in were public companies. They may have been horrible companies, but being public meant that investors had liquidity to sell their stocks.

The bubble today comes from private investors who are investing in apps and small tech companies.

http://blogmaverick.com/2015/03/04/w...ubble-of-2000/

This whole economy is fucking doomed. House of cards. Student Loans are going to suffocate the economy and drown universities leading to a domino effect. I am glad I am prepared with no debt, lots of cash. When the stock market soars to new highs that is a general indicator things are getting ready to break. My only hope is it happens on Obama's watch.

Cuban is wrong. I understand his point that the government could dry up a liquidity but he just doesn't understand how the VC market works today for any real sized business.

I can give you a real world example.

Big Data Startups

There are maybe 10-15 of these Big Data companies using new tech to compete against companies like HP and Accenture.

They are all VC funded but the dirty little secret is all the companies are funded by the exact same VC companies. The VC companies don't care which one takes off and becomes the new player in the marketplace. You invest 20 million in all fifteen companies, one for sure will become a 10 billion dollar company, couple others will survive and the others will all fail. In the end the VC companies always win.

Liquidity isn't going anywhere when you can fund everyone and almost guarantee a huge profit.

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Originally Posted by abrown83

Cuban is wrong. I understand his point that the government could dry up a liquidity but he just doesn't understand how the VC market works today for any real sized business.

I can give you a real world example.

Big Data Startups

There are maybe 10-15 of these Big Data companies using new tech to compete against companies like HP and Accenture.

They are all VC funded but the dirty little secret is all the companies are funded by the exact same VC companies. The VC companies don't care which one takes off and becomes the new player in the marketplace. You invest 20 million in all fifteen companies, one for sure will become a 10 billion dollar company, couple others will survive and the others will all fail. In the end the VC companies always win.

Liquidity isn't going anywhere when you can fund everyone and almost guarantee a huge profit.

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According to Cuban, these start up, like 99% of them have a vision that everyone will get wealthy when they sell. His contention is that is not reality in 2015, whereas it was in 1999. The SEC basically forbids small start ups in 2015 (even his own would have been in 1990s) from going public without real earnings. His contention is the small retail investor is hunting for pipe dreams that will never go public and will die on the vine. That is the bubble because the lack of liquidity will prevent them from getting even their investment back.

With that said, on CNBC he was more compelling about the domino effect of student loans and how that will cripple the student, the University, the lenders and then the dominos falls.

Demand for Apple Watch could use up third of world’s gold

http://cdn.cultofmac.com/wp-content/...ld-640x425.jpg

The whole VC world is indeed frothy right now. That said Cuban isn't right about this for two reasons.

1. Shitbrick app company isn't listed on Nasdaq and it didn't go from $20 to $500 in 4 months on complete bullshit. Giving these companies an exchange to operate on gives Goldman Sachs the ability to play Jesus Christ with some of these stocks.

2. When shitbrick goes out of business its a VC company/person who is taking the loss. It's not a major mutual fund or tech ETF that everyone is invested in thier 401Ks or other individual retirement accounts. If the whole VC market collapsed tomorrow it wouldn't (directly) impact joe public.

Read the blog and my quick take is that this is shots fired at stupid SEC regulations.

His clever use of the words Tech Bubble when we are at NASDAQ 5000 grabs eyeballs but confuses his message.

In 2000 tech companies went to (stock) market more quickly. Some blew up and some didn't. That's free enterprise at work. A few got rich and many lost money trading the dream. That folks gambled their money in a bubble is their right & privalege.

The SEC wrote new rules that make it harder to invest in startups. The VC phase lasts longer. The unintended consequence (government regulations nearly always backfire) was that these investments are less liquid than they were before. You can't sell and take a small loss now.

Additionally, you can't stop folks from finding inventive schemes to "get in". Folks trying to "get in" for as little as $5k now. Kiss your $5k goodbye in its entirety cause there is no market to sell. Well played SEC.

Mark Cuban is right. This regulation was intended to protect the public but ultimately fucked them & runs concurrent with my disagreement with Druff concerning poker regulation. You can always count on the government to fuck shit up.

Stop thinking you know what's best for me.

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Originally Posted by Tony

In a bubble there is always someone with a “great” idea pitching an investor the dream of a billion dollar payout with a comparison to an existing success story. In the tech bubble it was Broadcast.com, AOL, Netscape, etc. Today its, Uber, Twitter, Facebook, etc.

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Mark Cuban got the biggest benefit right before the tech crash of 2000.
He made over $5 Billion from selling Broadcast.com to Yahoo.
He was very lucky because just a couple years later, Broadcast.com became totally worthless.

If people were to analyze all the deals on that show Shark Tank, most of the investments don't make any money.

Broadcast.com, Netscape never made any real money, AOL overcharged people for internet access.

Uber, Twitter, Facebook make tons of money, however Uber may be a bit over valuated.


http://www.theipinionsjournal.com/wp...mark-cuban.jpg

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Originally Posted by Tony

My only hope is it happens on Obama's watch.

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No it will be during Hillary......then it makes it easier for elites to have the plebs point that it was a woman who fucked it all up.

Also, September 30, 2016 is an important date: its when the debt ceiling limit talk comes up again in Congress (it also comes up this yr on 9/30/2015; but they have an "emergency rider" like they used last year that can fast track it through). BUT in 2016, you'll have all of these douchebags running for their local office, or trying to upgrade to President, and they will want the spotlight and hold shit hostage (for more corporate welfare handouts) for TV time.

nvm the Fed maybe hiking rates in June (although I don't think they will; even so, the ECB will make up the CTRL-P slack as they defend against Eurozone Deflation-palooza 2015).

That being said, even with the sell-off today, DJIA 19k-20k is very doable by the end of July. Then around late August is when fun begins.

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Originally Posted by Shizzmoney

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Originally Posted by Tony

My only hope is it happens on Obama's watch.

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No it will be during Hillary......then it makes it easier for elites to have the plebs point that it was a woman who fucked it all up.

Also, September 30, 2016 is an important date: its when the debt ceiling limit talk comes up again in Congress (it also comes up this yr on 9/30/2015; but they have an "emergency rider" like they used last year that can fast track it through). BUT in 2016, you'll have all of these douchebags running for their local office, or trying to upgrade to President, and they will want the spotlight and hold shit hostage (for more corporate welfare handouts) for TV time.

nvm the Fed maybe hiking rates in June (although I don't think they will; even so, the ECB will make up the CTRL-P slack as they defend against Eurozone Deflation-palooza 2015).

That being said, even with the sell-off today, DJIA 19k-20k is very doable by the end of July. Then around late August is when fun begins.

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Late August and how can we make money? Not interested in 10% gains over a year. Looking for doubles or triples.

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Originally Posted by Tony

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Originally Posted by Shizzmoney

No it will be during Hillary......then it makes it easier for elites to have the plebs point that it was a woman who fucked it all up.

Also, September 30, 2016 is an important date: its when the debt ceiling limit talk comes up again in Congress (it also comes up this yr on 9/30/2015; but they have an "emergency rider" like they used last year that can fast track it through). BUT in 2016, you'll have all of these douchebags running for their local office, or trying to upgrade to President, and they will want the spotlight and hold shit hostage (for more corporate welfare handouts) for TV time.

nvm the Fed maybe hiking rates in June (although I don't think they will; even so, the ECB will make up the CTRL-P slack as they defend against Eurozone Deflation-palooza 2015).

That being said, even with the sell-off today, DJIA 19k-20k is very doable by the end of July. Then around late August is when fun begins.

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Late August and how can we make money? Not interested in 10% gains over a year. Looking for doubles or triples.

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If you want a double or triple then SPXS because its coming and when it comes it will be fast and hard.

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Originally Posted by Pooh

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Originally Posted by Tony

Late August and how can we make money? Not interested in 10% gains over a year. Looking for doubles or triples.

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If you want a double or triple then SPXS because its coming and when it comes it will be fast and hard.

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bingo