Reblogging An Old Post: The Word Bubble

I wrote this in 2011. I think it’s as true today as it was then. It’s interesting that Marc Andreessen, in the video I posted over the weekend, also links the word Bubble in his mind to the Internet bubble that we all lived through. I guess for a certain cohort of investors, that is a very definitive moment in our lives that we will always be scarred by.


In all the posts over the past year or so outlining my thoughts on the financing and valuation environment in the internet sector, I’ve avoided using the word Bubble. It is intentional. For me Bubble will always be inexorably linked to what went down in 1999 and 2000 in the internet sector. And I agree with Mike Arrington that what is going on now is different. I do not think we are in a Bubble per se. That is why I don’t use the word.

But I am equally sure that we are in the glass is half full part of the cycle. Investors are focusing on the upside and ignoring the downside. That part of the investment cycle lasts for a while and then things change and investors focus on the downside and ignore the upside. Markets are defined by greed and fear. We are in the greed mode right now.

I don’t view this as whining. There is nothing to whine about. Investors are making money hand over fist. Why would I whine about that? But I do think it is important to point out the inevitability of the market cycles. There will come a time when the environment we are in will be in the rear view mirror. And entrepreneurs should be crystal clear about that. This is a time to raise money and sock it away for a rainy day. Because it will rain.

And investors should recognize that the current valuation environment will not exist at some point in the future. The companies we invest in will need to grow into these valuations or we will face writedowns and writeoffs. We should not let the greed emotions cloud our judgement. Yes, that hot deal sure looks damn good right now. But deals are actually companies and most venture investments are held for five to seven years. I’ve likened them to marriages over the years. Don’t let the lust for the deal lead to a bad marriage that you have to be in for the next decade.

I’ve made all of these mistakes. I know what happens. I am prepared for it. That doesn’t mean we aren’t investing in this cycle. We are as active as we’ve ever been. But we are investing at this stage of the cycle with our eyes wide open. And I’m writing about it in the hopes that others do the same.

#VC & Technology

Comments (Archived):

  1. JimHirshfield

    So… Still going strong?

  2. Barry Nolan

    Channeling bubbles through Carlota Perez. Do you consider mobile as in the instalment phase, or a continued deployment phase of the internet?

    1. fredwilson


      1. Barry Nolan

        True. Yet mobile somehow fundamentally changes how we deploy the Internet. We once logged ‘on’. Now, especially through mobile, the Internet is ‘in’ practically everything. It has almost become invisible. When we instinctively reach for an app to hail a cab, move money, record a TV show, or send a message, it’s through an invisible Internet, the magic happens.

      2. JamesHRH

        This is a great answer.Some mobile is deployment (cloud services); some is installing totally new ideas.Golden Age?

  3. Niv Dror

    From Marc’s talk at Stanford:–We are not in a bubble! We’re in the mature deployment phase of the web.–There was a bubble from 1998 to 2000 that ended with a very profound crash, followed by years of pain and a very slow recovery.–Was deeply traumatizing for people, “an abject lesson in the psychology of bubbles and markets.”–People are much more highly sensitized to bubbles right after a bubble (follows a historical pattern).–Carlota Perez is the best thinker on this topic (author of Technological Revolutions and Financial Capital: The Dynamics of Bubbles and Golden Ages).For the full video summary on the DataFox Blog:

  4. Niv Dror

    This is what all the bubble talk in the last 10 years has been about:

    1. fredwilson


  5. JamesHRH

    I love golf & this always makes me laugh. The folly of the human spirit – sad ending to a bumpy but highly productive ride yesterday.

    1. fredwilson

      so bummed about this. i loved robin williams

      1. JamesHRH

        This perspective, courtesy of is particularly compelling, especially if you are the parent of a child with a high IQ and a high awareness of their surroundings.Why? Well, I once heard this chilling statement (from someone who is now a billionaire, I believe): ‘ XXXXX, you seem like a really bright young guy. You know, in my experience, most really bright people are not successful and nearly all of them are unhappy.’…

        1. fredwilson

          i went to MIT with many people like that

        2. Carl Rahn Griffith

          The dumber I feel, the happier I am. I’m trying to think less and less.

        3. FlavioGomes

          “you’re F’n economically freebasing!” “Well we had some complex formulas but we didn’t factor in Greed and Panic!” – Robin Williams. Absolute comic genius

      2. James Ferguson @kWIQly

        @fredwilson:disqus – You just broke the news for me ! – I am on my way to Glasgow from Switzerland tomorrow and I guess I will raise a couple of glasses to him. What a shame – I will go and read the articles now

      3. LE

        To me, this is really a case of a man not having the underlying ability and constition to live up and cope with what he is able to achieve. (Same thing happens with all sorts of people. Another might be the business man that needs to drink and smoke to deal with the stress of his job.)I remember in my early 30’s having a great opportunity which I ended up passing on. I was getting all sorts of heart palpitations as a result of the stress of the potential good outcome. I decided right then and there to pull back and not go forward. I realized that my body probably wasn’t going to be able to cope with it if it couldn’t deal with even the thought of it (and of course there was other info I was relying on to come to that conclusion). Otoh I’ve gone full steam on things that most people would think are way more stressful and don’t even miss a beat. Like zip problems. Nothing bothers me. So the particulars matter. And you have to know (as Clint Eastwood said) “your limitations”.This is really a case of be careful what you wish for.I mean you put a person like Williams in the situation he was in where he is exposed and weak to the temptations of drugs (cocaine apparently) and look what happens. Doesn’t mean that he wouldn’t have killed himself if he was “just a high school history teacher” of course. But definitely makes you wonder if in the end he would have been happy without the highs of that life (and god knows there must be some pretty nice highs).

    2. Salt Shaker

      I had the pleasure of spending an evening with Robin, Billy Crystal and Whoopi Goldberg while shooting a promo for HBO’s “Comic Relief” in the mid-90’s. Some of the promo material we shot was scripted, while most wasn’t. It was roll tape and let these comedic icons do their thing. Robin not surprisingly was on fire, Billy a bit less so and Whoopi considerably less than the other two. The best part of the evening was when we all gathered around a portable radio to listen to a ‘live’ debate between Ross Perot and Al Gore on NAFTA. Talk about having the perfect fodder for Robin to do what he does best. He kept interjecting with spot on imitations of each. He’d bounce from Perot to Gore and back to Perot again. His timing, his accent and the content of all this spontaneous material was absolutely hilarious. His quick wit spewed instantaneously from within as if he was on some kind of supernatural auto pilot. This went on for a good 15-20 minutes and was like nothing I had ever seen or heard before. Pure fucking genius. What a treat to be entertained by such a masterful talent in such an intimate setting. It was like having him perform in your living room. A beloved Grammy, Emmy and Academy Award winning genius….A truly special talent.

      1. JamesHRH

        What an experience!Genius is a big word, which applies. The piece people miss about genius is that it requires a commitment to something that others are unwilling to make. Any thoughts? Breadth of roles?Billy & whoopi would have been seriously overmatched, despite being talented professional funny people……

      2. awaldstein

        So cool.And a lot to be learned about dealing with failure and the boosting power of ego from entertainers.First time I was in a meeting with movie producers and directors that were household names I realized that their poise was about having the unbelievable self confidence to make thousands of decisions, spending millions of dollars on a hunch, which sometime worked and often didn’t.Remarkable in a lot of ways.

        1. LE

          And a lot to be learned about dealing with failure and the boosting power of ego from entertainers.Entertainers need the big break and by definition have to kiss many frogs before they find it. If ever.This is something that people don’t realize when they get frustrated with dating for example. Or finding a job. You aren’t looking for a date per week (usually) or a job each week. You are only looking for one. As a result rejection is something that shouldn’t bother you as much since in theory if you keep plugging away you will find someone (that is as long as you recognize and can match what you can give in return). Most people who don’t find someone are probably unrealistic of what they have to offer given what they think they deserve. (In housing you are much more realistic, right?)Otoh selling a product or service is different. You have to toil away and take rejection but also make progress. You can’t go 6 mos. or a year and not make a sales (in certain sales situations that is).Entertainers are dreamers. If they weren’t common sense would dictate they are foolish to even try and think that they will hit it big. Most will not. It’s a stupid career choice.A relative of mine is an opera singer. He can have a gig and then a new creative director gets brought in and he looses the gig just like that. Different vision. Nothing to do with his capabilities as much as a particular creatives likes and dislikes. Otoh gigs he gets for singing on both jewish high holidays (he sings at the Park Ave. synagogue) and also at churches (in fancy areas) are very stable for him. Not on a whim but more functional.

      3. Girish Mehta

        That BBC debate few years back when they had technical difficulties getting started, and he jumped on stage impromptu and got the audience going.A true Genius of his time, of any time.

      4. fredwilson

        Yeah. He had something nobody else had

  6. William Mougayar

    Valuations: A game entrepreneurs play with VCs.Rules: If you don’t quickly grow into them, or if you don’t earn them before they are bestowed upon you, you keep losing each round, until you’re out of the game.

    1. awaldstein

      It’s a game that everyone plays.

  7. leapy

    Not just investors. Entrepreneurs were seriously burned in 99/2000. I signed investment docs that never got dated; had to let a great team go (honorably, fully paid); hibernated for a long long time.My critical threshold on new ideas is ridiculously stringent. My wife’s even more so!Start up economics are so different now that you’re correct. This isn’t a bubble. This is life.

  8. pointsnfigures

    Heard a talk with Eugene Fama once. He said, “There is no such thing as bubbles. If there were, you could predict them.” We only see bubbles in the rear view mirror. That being said, discipline is key when asset values are going up. I remember looking at the stock inflation of the 90’s and thinking two things: first, this internet thing is making companies way more productive so maybe there is something to it-and two, the railroads crashed in the late 1800’s, why won’t these things crash too.However, you shorted the market at your peril. I think we are in that fuzzy area now. Being short US Treasuries will be the greatest trade in someone’s lifetime if they get the timing right.What’s it mean for investors in startups? You better have a good line on where the next capital comes from before you write the first round check. For the startup, it means you better shepherd your resources judiciously. Take risk, but don’t throw stuff at the wall to see what sticks.

    1. LE

      If there were, you could predict them.You can’t predict them because you can predict at what point the tipping point of people will start to swim in the other direction and there will be some kind of mass exodus. So you can say “the conditions are ripe” (and they are now in my mind) but you can’t predict when the first blood will be drawn that will cause things to topple over. Airplane looses lift.this internet thing is making companies way more productive so maybe there is something to it-So you were rationalizing which can be done before, during, or after something happens.The problem is you only have access to some information. Not all of it. And certainly not knowledge of the future. So for example I can say “well seems to me that Puerto Rico is a great investment now” or “Cuba will certainly be a winner if it opens up to trade” but what I can’t predict is what things will get in the way of that or exist that I don’t know about. And will never be able to predict.Look my dad bought two particular small pieces of real estate in the 70’s. One was located where he was sure that the casinos would need the land when they expanded. And at the time, and for years later, that made sense most people would have agreed with him. The other was located in South Florida in an area that is now known as “Sunny Isles”. Well low and behold Sunny Isles property just recently sold to a developer that is putting up a mega luxury building. Nice dollars. The casino land is still vacant and in fact in AC you can see what is happening. (They are closing casinos so nobody is going to build anything in the foreseeable future. Ha ha.)Consequently, as you already know, if you are gambling you need to spread the bets around. If you can’t spread the bets around you probably shouldn’t be gambling.

      1. pointsnfigures

        You can’t predict them because markets are rational and price in all available information at any given time. The NASDAQ crapped out because new information came to the market. In the nineties, I experienced the magnitude of the trends first hand daily. I was trading in pits where the money flowed. The stock market was an impossible short. As a matter of fact, for one year if you would have bought five S&P’s on a Friday and sold them on the close Monday you’d have made $500k or more. But who knew?The Fed did initial research on productivity gains, and that was where some information came from. Others from informal networks, and then just seeing capital flow into certain things. Did Cisco have a bad quarter from 1995-2000?Real estate is a market that takes a while to correct. Supply and demand forces can’t go through it. In cash or futures markets, all relevant information is priced in the blink of an eye.

        1. JLM

          .Real estate is not priced daily because you may be in the 10th year of a 25-year lease with ATT and the current rents don’t mean anything.Big commercial institutional quality real estate uses the transparency of the lease as a security to underpin the bottom of the valuation continuum — it can’t be worth less than this because you’ve got leases to creditworthy tenants underpinning the cash flow.What does vary is the “capitalization rate” which is the current value multiplier based on alternative cash investment opportunities.A $1MM cash flow with a 10% cap rate is worth $10MM.A $1MM cash flow with a 5% cap rate is worth $20MM.Really good developers and investors learn to ride the cap rate curve. Great institutional investors don’t care too much as long as the current rate of return is better than what they can get on cash.Real estate, done right, doesn’t go to zero value. Ever.A guy like Fred Wilson with a lot of very risky VC related securities should be investing in fairly safe real estate. It will appreciate while they continue to work their risky businesses.JLM.

          1. LE

            Real estate, done right, doesn’t go to zero value. Ever.Would be curious on your thoughts on how it’s possible for a project like the Revel to get built in A/C when the market conditions are all on the table and knowable by all parties. (Casino traffic going to other states, declining market, crappy area etc.)You see this happens with real estate development. Developer takes a gamble on a project and goes bust (I have no statistics as far as how often but like a plane crash seems like more often than should happen given the time for preparation and fine tuning).I have my own theories (behaviorally wise) but would be curious for your take given your experience in this area.

          2. JLM

            .I was talking about institutional quality commercial real estate like CBD/suburban office buildings, apartments, shopping centers, warehouses and storage.Special purpose or operational real estate is a different game.Atlantic City was a head fake from the beginning. It will never work and has never contributed a single penny to the TIF (tax increment financing) District. The State of NJ took the bonds over.JLM.

          3. LE

            With respect to A/C Reese Paley (an art gallery owner who rented a 747 in the 70’s for his birthday) really nailed it. He essentially said that AC won’t work because they didn’t push the poor people out of the city and nobody wants to vacation in a place like that. Doesn’t have the resort feel. [1] Now back in the day there would be no problem with bulldozing things and making the entire city nice. But in today’s PC world you can’t do that. Reese is right of course. As a kid I used to tell my dad to “take the scenic route” to our new house recognizing that roads leading up to location are sometimes as important as the actual location for how it makes you feel.[1] I know in resort islands this is not the case but that’s different as island poor are not the same as domestic poor.

          4. LE

            One more thing. Just saw this today about the Revel in AC.Now this developer (who has a fairly good reputation and has been around for many years) says this about reuse of the Revel:…The big question now is what happens to all of that space? The casino resort occupies 6.3 million square feet of real estate on the northern end of the Boardwalk. Hospitality and tourism experts, as well as developers such as Carl Dranoff, had suggested the 1,400-room hotel could be converted into luxury condos or apartments, but the massive public spaces and cost to maintain Revel was probably a detriment to potential buyers, say some.Totally ridiculous. The area is going to absorb 1400 “luxury” condos? I mean you’d have to get the Chinese buyers in on that one for sure. Amazing that someone would actually suggest that. (Not to mention even the cost of taking 1400 hotel rooms and making them larger luxury condos.)It will be real interesting to see what happens with this one. Of course if they can move the building up to NY Metro the idea might work!

          5. fredwilson

            I am. Can you say “barbell strategy”?

  9. angoodkind

    The linguist in me got excited about the idea of a “word bubble.”

  10. Kaleem Ahmad

    both Bubble are strong

  11. Twain Twain

    It isn’t a bubble this time round because the greater amount of data available to investors and founders alike makes everything more transparent and insights on whether to invest / build out the product more contextual and informed.

    1. LE

      Doesn’t account for emotion in decision making. Also social proof and anchoring that is people being more likely to do something irrational based on what they see others doing and also in terms of a number appearing to be not as significant if you have a frame of reference to compare it to.Hence the data can be used against you.Look at sports team values. If you see someone buying a certain team for 1 billion another team that comes along priced at 900 million (for whatever reason it’s a fictional example) doesn’t seem that bad and can be rationalized regardless of whether the 1 billion sale made any sense at all.

      1. Twain Twain

        Agree with you; pls see my reply to SubstrateUndertow.Building a system that can deal with emotion-based data is something I’ve been working on.

    2. SubstrateUndertow

      That maybe a little too myopically definitive ?So you define “bubble” as greed operating/framed within some sort of critically limited alinement of perspective/data ?Within some domain, be it, social, commercial, political, environmental, geo- resources we are always operating on seriously limited perspective/data, especially regarding the organically harmonic alignments operating across/between those global-culture domains.We are always on the edge waiting for some collective black-swan moment of intermodal collective-clarity to realigns our big-picture reality-data across those global-culture domains thus suddenly shaking our collective faith in our presently-myopic, often endeavour/industry-specific, greed-limited perspectives.My gut feeling is that the harmonic cross-talk driving those global-culture domain-realignments is more bubble-predictive than any myopic/industry-specific reality-data informed by very contextually-limited perspectives ?Yes “software is eating the world”!Yes software(social-synchronicity) is on an unstoppable tear.BUTThat software-tear will be periodically punctuated by rest stops where we all stop and eat software that finds itself significantly misaligned with other global-culture domain requirements.Those global-culture domain-realignment “bubble” inflection points are the fly in the predictive ointment !

      1. Twain Twain

        Well, I don’t define “bubble” as greed operating/framed within some sort of critically limited alinement of perspective/data, as you assume I do.I define “bubble” as a value inflation caused by a multitude of factors, including:* lack of information (access and analysis)* vested interests engaging in price arbitrage without others being able to track this* myopic “me too” judgement by investors piling into the 1000th clone of Snapchat* imbalanced policies (government and corporate; an example would be putting eggs into one basket and not diversifying)During Web 1.0, there was no Open Data, no APIs, no graphs which meant that a lot of data that’s helpful for us to gain perspective — whether we’re investors or founders — was locked in silos and available only to a cliqué or if you had a few $ thousand to subscribe to the data.Data in Web 2.0 is more readily accessible and open to Joe and Jane Public.As for the “Black Swan”, it’s comparable with the “Butterfly Effect” theory that preceded it by a decade.The global economy will continue to be cyclical and subject to fluctuations when our consumption models are based on the functions of logic inputs of the 7Ps (people demographics, product features, price, place, etc) and when Probability provides the tools by which we correlate those relationships and try to “fit the curve”.Probability and its pattern recognition algorithms aren’t designed to deal with emotions and other as-yet unmeasured biases that affect our decisions and consumptions.For too long, Price and Value have been treated synonymously when they shouldn’t be. Maths and Probability can deal with Price. Value, though, embodies a person’s subjective emotions and perceptions towards an item.One investor may pay a huge premium to “get in on the deal” whilst another will sit it out and wait for a subsequent round. Those decisions aren’t just based on whatever standard valuation can be applied (comparables, DCF, etc.).Art, emotions and personal chemistry between founder-investor are also involved and mathematical models can’t (yet) solve those.

  12. jason wright

    entrepreneurs who self valuate, book a consultation with Dr Fred immediately.

  13. Philip Smith

    This one of my favorite posts from the past . . . including one of my favorite posts (fear and greed) that I first heard in graduate school many years ago.The post would be equally relevant during a period of fear.

  14. AlexBangash

    It is still a tale of haves and have nots. While fund performance is looking great for most VCs, few new ones are able to raise money from institutional LPs. The rich are getting richer. LP’s wont touch newer models, which ironically are the best positioned. The VCs are largely investing in and doubling down on companies with revenue traction. For companies with high MRR or trailing revenue, there is an abundance of late stage funding–not so much for the rest–as if late stage companies with millions in monthly burn never lost money. The things that are funded are UBER for X and Airbnb for Y. It is no wonder that both UBER and Airbnb raised money at a terrible time. We still have some ways to go, but we are closer to the top–and the best vintages are likely behind us.

    1. JLM

      .It is a tale of the “haves” and the “have mores”, no?JLM.

      1. AlexBangash

        yes…to some extent.

  15. christopolis

    The major difference between 99-00 and now is that eyeballs are now traction.Craigslist operates with less than 20 people.

  16. Richard

    One man’s bubble is another’s woman’s buying opportunity, see priceline.

  17. Matthew Perle

    In general, how much runway would you advise companies to shoot for in this environment? Taking into account your other posts about not raising too much money, I wouldn’t want to dilute the cap table for funding that isn’t necessarily critical at this point.

  18. ShanaC

    There was no big down after you wrote this last time.#thinking.I’m also seeing a lot of odd investments if you look at the front page of techcrunch. And a lot of smart ones. But a lot of odd ones as well, as well as some questions about sustainability of process when I look at these companies.But that is just me

  19. howardlindzon

    i say 80 percent full but the direction is what matters for now

    1. James Ferguson @kWIQly

      Forgive my gravity – to differentiate -it is only the rate of change of direction that weighs things down ! 😉

  20. Carl Rahn Griffith

    Tulips had mania. At least tulips are pretty and mania can be treated. We need a Hunter S Thompson parody – Fear and Loathing in Silicon Valley.

    1. Will

      Speaking of fear and loathing

      1. Will

        Never mind. Can’t add a pic from phone

  21. JimHirshfield

    And this piece would have us believe startup activity has been on a long decline. Not sure if this is selective interpretation of data or what?

  22. JLM

    .Of course we are in a bubble. We are, however, informed as to our behavior by what happened last time around.Markets are like the ocean — constant movement between high and low tide while almost everyone is looking for the slack tide equilibrium which exists for only a second and then the flow reverses.The solution is better planning and deeper planning, the kind that anticipates the future in the same way the Great Gretzky said to skate to where the puck is going; and, building sustainable engines of commerce which can plow through changing currents and waves.In my last two years transitioning from 33 years of CEOing to being a CEO coach, I can say with certainty that the winners are all good planners and build sustainable businesses not just hot products.Nothing wrong with taking the product first, last and always approach, mind you, as long as you can swim when the rains start falling.I wrote about this very thing here — didn’t want to clog the arteries over here at…JLM.

    1. LE

      I can say with certainty that the winners are all good planners and build sustainable businesses not just hot products.Are you saying “winners” with respect to people you are coaching? If so how can you say that if you’ve only been observing them for less than 2 years?

      1. JLM

        .Almost everyone who calls me has a problem or thinks they have a problem. Nobody ever calls me because they think things are going too well. Winning is therefore usually very easy to recognize and assess.Not everyone is a winner. Some are not quite there but they are on the way. Some are failures.In that context, I have worked with folks who have scaled their businesses from being lifestyle businesses to being enormously financially successful, who have entertained very meaningful exits, who have obtained substantial funding, who have restructured their founder ownership and other critical challenges.In not one instance have I had a CEO who refused to improve their planning. In some instances the stress relief that a CEO has attained as a result of focusing on their basic vision and plan has been miraculous. I have seen CEOs peel back ten years of stress. It is real.Perhaps the best measure of their success is the ability for them to align their personal and team efforts. The power of alignment is what makes Special Forces special.Business is not rocket science and experience is very valuable. Renting experience is cheaper than paying full tuition. Real experience not just book learning.JLM.

        1. JamesHRH

          I have preached alignment for 15 years. +1000.Great innovators are masters of alignment, in that they find the key element of a emerging tidal wave:- Gates: normals need tools for PCs to ‘be on every desk’.- Page: mushrooming online content useless unless you can find it.- Jobs: touch interface turns handheld device into a product for the 2-92 demo (!) & a Swiss Army Knife singularity of use cases.- Zuck: people mostly interested in other people, online or off.Always ironic: the people guy (Jobs) creates via device based insight; the product guys (G,P & Z) create via people based insight.Oh, and it’s not a bubble. Not even close. @fredwilson is right. It’s deploy & install combo platter.

        2. LE

          Business is not rocket science and experience is very valuable. Renting experience is cheaper than paying full tuition. Real experience not just book learning.I can’t find exactly what I said now but I had someone who was referred to me for help (I don’t do consulting full time, and don’t want to either, but it’s fun even if it doesn’t pay very well) and I essentially closed the deal (if you want to call it that) by saying something like “if you think you can duplicate my x years of experience in this subject matter feel free to try but you will almost certainly be wrong!”As it happens they had done something with someone prior to asking for my help (which happens frequently) and that person had done an ok job except for a critical error that anyone with experience would have avoided. And the critical error completely obliterated the “ok” job so it didn’t even matter.I mean I knew even as a kid that Disney didn’t assemble property by saying “Hi I’m Walt and I want to buy your orange groves can you quote me a price!”. (The type of error that they made..)

          1. JLM

            .I agree more with you than you do with yourself.Where this really shows today is in American foreign policy. The lack of experience and a failure to recognize clear patterns of conduct have given rise to some very amateurish failures.I was chatting with some former professional soldiers several of whom had worn stars and they were decrying the failure to attack ISIS/L now that they have come out of their holes.In every confrontation with terrorism it has been their ability to hide in the shadows which has made the job to eliminate them so difficult.Now they are strung out along a 600 mile road and visible to the naked eye. Now is THE time to decisively engage. Now is the time to eliminate them to the last man.It has nothing to do with policy, it is all experience.Destroy the enemy when they present themselves on terrain which is most advantageous to you; and, arm those who are willing to fight.We should be giving the Kurds everything in the store. Let them stop the advance and when ISIS is immobile wipe them off the face of the earth.There will not be another time better to destroy the Caliphate than in the next 3 months.Of course, Martha’s Vineyard is very nice this time of year.JLM.

          2. LE

            In short lack of the seat of the pants feel which allows you to take your knowledge and apply it to a particular situation.Something that a street smart type of person would understand better than a book smart person. (Doesn’t mean they are always going to be right of course..)Obama’s “crime” isn’t so much that he doesn’t have the experience it’s that he is not able to assemble a team and come to the right conclusions with the help of that team as the decider.On some talking head show the other day someone of importance (can’t remember who but it was an above average talking head) was making fun of Obama for still wanting to get the sides in a room to talk things out. Like some fucking marital therapist would do. Who doesn’t recognize the agendas of people who don’t think rationally like we at least try to do.Of course, Martha’s Vineyard is very nice this time of year.Economy wise it would have made more sense for Obama to loaf off at a new place that nobody has ever heard of and give that place a shot in the arm and free advertising.

          3. sigmaalgebra

            That’s not the only explanation, and I believe not the most accurate one.

          4. sigmaalgebra

            Now they are strung out along a 600 mile road and visible to the naked eye. Now is THE time to decisively engage. Now is the time to eliminate them to the last man. No, no, no, no!!!!! :-)!We tried that in Gulf War I, and it failed! :-)!Saddam’s Republican Idiots or whatever were retreating from Kuwait along a long road, with their trucks packed with loot from Kuwait, and we sent over a few A-10s that made chopped liver, sausage input, and reeking sewage out of the whole long road, and the world’s newsies furrowed their brows, wrung their hands, frowned their mouths, decried the cruelty, cruel, cruel, how could we be so cruel to those poor Iraqis who had only robbed, burned, destroyed, raped, pillaged, etc. little Kuwait!!!! So, Bush stopped it. Bummer.Now, you want to do the same! Oh, the angst, the tears, the indignation, the outrage, the wringing of the hands, the sympathy and empathy for those poor suffering ISIS terrorists who only want to crucify Christians, disembowel Shiites, torture, burn, rape, pillage, etc., everyone they can find, along with ancient monuments, some genocide on the side, etc. Poor ISIS! [Note, FBI: This is a facetious comment, that is, parody, that is, sarcasm, that is, in words even the FBI or NSA could understand, a joke.]Yup, what we need are a few A-10s or, from carriers, some F-18s should also do.But the newsies would do their usual and blame the US for being cruel, so cruel! Instead the newsies would want us to fight ‘like gentlemen’ right down there, face to face, on the ground, and then the newsies could get a lot more stories about how bad it was for the US to be in Iraq.The newsies want, what? Three answers, and the only one you need is, stories, especially liberal, bleeding heart stories, to grab people by the heart, the gut, and below the belt, always below the shoulders, never between the ears. Grabbing, always grabbing at me, the newsies. I deeply, profoundly, bitterly, hate and despise such newsies. They just want their ‘stories’ that ‘grab’ people. Those stories in effect also kill people, too many terrific US people.But the newsies still have a lot of influence. E.g., Bush 41 didn’t just say, “It’ll be over when it’s over, and it’s not quite over yet. I’ll let you know when it’s over. We’ll even have a fat lady sing.”.The worst part is letting the newsies have pictures like they did from the A-10 blood sausage factory effort.Once Schwartzkopf was asked, roughly, “You said there were hundreds of thousands of Iraqi soldiers in the desert you crossed in the 100 hours. Where are those Iraqi soldiers now?”.His answer, “They are still there.”.Now, THAT’S the way to fight a war!We had more injuries from R&R than from enemy action! “Ah, I love the bright glow of an Iraqi tank on F-111 infrared in the desert in the first hours of night; it looks like victory!”. Iraqi tank plinking, more fun than video games! Some of those tanks catch fire inside, and all the ammunition inside blasts a column of sparks, fire, and smoke high and straight up, out of the top hatch. Liking this is “foolish but it’s fun”!And the newsies didn’t have any good pictures to grab people by the heart, etc. so ignored the situation. Good.

  23. LE

    Arrington is essentially saying that we are not in a bubble because it’s not the same or as bad as it was before or that it’s different this time.This reminds me somewhat of people who try to make marijuana appear to be benign by comparing it to alcohol and saying “hey it’s safer than alcohol why don’t we outlaw that”.The fact that it’s different now (or that marijuana isn’t “as bad”) doesn’t make it good or in the case of a bubble that we are not in a bubble. Or that something isn’t rotten.Let’s call it the “this is better than that” persuasion technique whereby you try and juxtapose something of dubious benefit (or potential danger) against a worse evil of known acceptability.”You are more likely to get in an auto accident than to get mugged on the streets of NYC” (therefore NYC is safe maybe you should stop driving).”You are more likely to get hit by lighting than get injured doing para-sailing” (so it’s safe to do para-sailing or bungee jumping or whatever).”We aren’t in a bubble now because people aren’t hiring clueless biz dev’s and spending $1 to make .50c”.Etc.

  24. ErikSchwartz

    I think there are certainly local eco system bubbles caused by a bubble in salaries supported by investment rather than cash flow that then trickles down into the local economy.You have an $80K engineer who is making $150K for a cash flow negative, investment supported, online dryclean delivery company. This engineer is spending all their income on inflated rent, food delivery (also investor subsidized), and riding in Ubers.When it turns out the online dryclean company is an OK business but not a big business the investors will force them to survive on cash flow which means said engineer will get cut to $80K. The loss of $70K in discretionary spending will impact the landlord, food delivery, and Uber.But this is a local (SF, NY, maybe Boston) phenomenon.

  25. Carl Rahn Griffith

    Ironically, on Twitter just now…@ReformedBroker: A business model based on mental illness, i.e. “in-game purchases of digital goods”, makes me nervous. $KING $ZNGA

  26. sigmaalgebra

    “It’s not a ‘bubble’. It’s uh, uh, uh, it’s, right, it’s a ‘boom’!”A bubble by any other name would smell the same?So, a question: If an investor invests, say, $30 million in some little company with a $150 million pre-money evaluation, then by what means, path, events, etc. other than smoking funny stuff does the investor hope to get their money back? Here are my guesses, all of which I suspect are wrong so am eager to learn about what’s right:(1) The company will be bought by Yahoo, Google, Facebook, Twitter, Microsoft, etc., maybe including even some Chinese company, just for the ‘talented’ employees, i.e., and ‘acquhire’, with the business itself shut down and the users/customers, whatever they were, cut loose?(2) Some hedge fund will buy them, hold hoping the bubble, uh, ‘boom’, will further inflate prices and, then, try to sell near the top. This approach is good for California surfers who know how to ride a wave and get off just in time before they ‘wipe out’?(3) Hope that the NASDAQ goes wild (1999 over again), do an IPO, get a big ‘first day pop’, then pity anything between them and the door when the ‘lockup period’ is over. This approach can get some help if, say, the investment banking arm of some retail stock broker underwrites the IPO, and then the retail side of the firm ‘cooperates’ by investing a lot of their customers’ money in the stock, enough to make the IPO ‘pop’ and keep the prices up until the time to run for the door. So, watch what options on the common stock are doing right before/after the lock up period ends?(4) The venture firm will merge the company with another one in their portfolio on terms that favor the venture firm?(5) Just wait for serendipity, i.e., luck, and/or help luck along with some publicity, and then sell out?What would some of the real reasons be?

    1. Carl Rahn Griffith

      I remember Business Plans…

      1. sigmaalgebra

        Business PlansAh, you’re showing your age, so ‘old school’! :-)!Instead, you got to get caught up with the times, be “thoroughly modern”, got to cut the whole thing back to 140 characters or fewer! Gee, in an old school ‘business plan’, just the section TOC, abstract, or executive summary would be much longer than that!Besides, no need! So, maybe the investors have monthly board meetings and pass out the $30 million in ‘tranches’ depending on ‘milestones’ set and reviewed at the board meetings! So, all the investors are risking is the first tranche! :-)!Or, an investor might think and, eventually explain, to borrow from the Bogart comment in ‘The Maltese Falcon’, “We didn’t believe your story (business plan). We believed your ComScore numbers.” :-)!

    2. Steven Kuyan

      Its always better to be lucky than good, especially when the odds aren’t clear. Thats why you have hope/luck in most of your guesses.

  27. jason wright

    “I’ve made all of these mistakes.”… and the measure of smartness? the person who makes a mistake does not make that same mistake twice.

  28. Emily Merkle

    timing; this just came up in convo yesterrday. I *always* plug USV as The Model.

  29. jason wright

    the range of opportunities was so narrow back then. isn’t that what caused the bubble?