How long till the next Tech Bubble busts in SF??

[andyadhi01]

99% of startups are rich kids burning their trust fund to live the SF startup lifestyle.

[Ruth4Truth]

Originally Posted by BayAreaHillbilly

The issue is, SF, the Bay and CA in general have lost the middle class. And meanwhile, not only tech dooshies but also, international money in general, have beat a path to our door drawn by climate, lifestyle and other aesthetics.

We now have these enclaves of wealth in a vast sea of poverty and secular decline.

Kind of feudal, when you get right down to it.

Sounds like Aspen and Telluride, CO. Full of mansions belonging to German and Swiss industrialists and financiers, while the people who work in town in the service and construction industries live in small towns 1/2 hr. drive away, because they can't afford the insane property values and rents in town. Only the wealthy can afford to live in those resort towns.

[AngusHsu]

In the next 12 months, the tech bubble will likely burst. In what is termed creative destruction, not all the startups setting up shop along Mid-Market and SoMa will survive. Only the best in a Darwinian struggle will stay afloat. Look at Zynga burning into flames already.

I can't wait for the crash only because I am not in tech. Rents may finally come down to levels in line with median incomes. $4000 for a 2-bedroom, no thanks.

[bigdumbgod]

Originally Posted by AngusHsu

In the next 12 months, the tech bubble will likely burst. In what is termed creative destruction, not all the startups setting up shop along Mid-Market and SoMa will survive. Only the best in a Darwinian struggle will stay afloat. Look at Zynga burning into flames already.

I can't wait for the crash only because I am not in tech. Rents may finally come down to levels in line with median incomes. $4000 for a 2-bedroom, no thanks.

When the latest tech bubble bursts, there will be many wayward techies getting involved in the MMJ industry, which will be booming, whatever the law may say. There are an awful lot of engineer folks already pursuing and succeeding on this path in the Bay Area. (Let's just say, all that startup money doesn't necessarily come from mommy, daddy, or Page Mill Road).

[cardinal2007]

The problem is that there is not a bubble, I'm sure you're probably thinking the same thing about the housing market, but the numbers support the current economy. Most of the competition in the tech market is not driven by the latest round of startups, but by the big companies that buy them out. Essentially we will probably need to have another global downturn for the tech companies to stop earning so much money and stop competing in so many segments. One example of companies creating Pandora competitors, both Google and Apple have done that, another is them trying to compete to buy Waze, which in someways stems from Apple getting into maps. As long as these companies are competing to buy up or create new services like this we will still have the current economy. Google and Apple are making record profits (though Apple's growth has dissapointed investors) and this will continue until either companies cede ground, like Google dropping Google+, or Apple dropping Apple maps, I don't see either soon. So we are probably at least 3 years away from another downturn. For there to be a bubble to pop though we would need to have a bubble, a real bubble with valuations and expectation far surpassing what fundamentals support, if this were the dot-com era we would be in 1998 or 1999 at best, but there really isn't the same crazy money from the stock market these days, the only companies I see with crazy P/E ratios are Amazon, and LinkedIn, which people expect huge growth from based on historical revenue growth, those may have to scale back if they don't succeed.

The OPs prediction already failed to pass, in another 7 months we will see about BayAreaHillbilly's prediction, but my guess is that will be a no. We really need to be in a bubble to see something like a bursting bubble here.

But if you really think so, you can take short positions on tech stocks for the time being, put options are available for most big tech companies. If it becomes another 2000/2001 you will be very wealthy off those puts.

[bigdumbgod]

Originally Posted by cardinal2007

The problem is that there is not a bubble

Saw a pinche little old house down the street worth $320,000 last year just sell for $480,000, with very modest renovations. It's a bubble.

[SunDevil1212]

Look, I know you guys all hate the tech industry, but don't hold your breath for another bubble-burst. Yes, Zynga is having well-documented problems. But that's just one firm.

In addition to what cardinal2007 posted above, let's look at Facebook: they've received a lot of negative press because they over-priced their shares in their IPO last year and initial investors are disappointed. But guess what? Their revenues are up and they are actually doing quite well as a business thus far if you ignore share prices:

Business versus stock
Arguably, Facebook as a business has done extraordinarily well since the company went public. Revenue was up 37.8% in the company's first quarter. Plus, mobile advertising revenue now accounts for 30% of the company's revenue, up from virtually zero in 2011. This should alleviate the initial concerns investors had when the company went public about whether Facebook could monetize mobile.

So what's the problem? Expectations. Facebook went public with a stock price of $38, trading at 107 times its trailing-12-month earnings at the time. Expectations for the stock were nothing short of exorbitant.

Facebook's Stock Will Go Up, Says Zuckerberg - DailyFinance

So, the big difference between now and the last tech boom here is that a lot of these companies are actually turning profits now. The boom is not based purely on speculation and potential. Sure, there will be plenty of start-ups that fail - but that should be expected, and its not necessarily symptomatic of larger problems in the industry. New businesses fail at a high rate in any industry.

[krudmonk]

Originally Posted by bigdumbgod

Saw a pinche little old house down the street worth $320,000 last year just sell for $480,000, with very modest renovations. It's a bubble.

Perhaps you underestimate the recession's nadir.

[gone down south]

I'll give you a slight over-valuation, but I'm not buying this is a bubble.
And over-valuations correct, they don't crash.

Remember that the current crop of tech companies are, for the most part, highly concerned about revenue generation. The lessons of the first dot com era haven't been forgotten. All these new companies have very strong business plans that have either "make money" or "provide sufficient value that a bigger company will buy us out and make money with our product" at their core.

[BayAreaHillbilly]

How can I hate tech? Look at my profile.