The following people have which former employer — other than the US government — in common?
Clockwise from top left: Gary Gensler, Chairman of the CFTC; Bill Dudley, President of the NY Fed; Jon Corzine, governor of New Jersey; Hank Paulson, Treasury Secretary who gave Goldman Sachs a $10B bailout.
If you like stocks, twits, or just have nothing better to do next Tuesday night, please join me at the first San Francisco StockTwits meetup, where we will discuss topics of great social and political import.
Our First SFIT Meetup!
Tuesday, Mar 31, 2015, 6:00 PM
83 Proof 83 1st St San Francisco, CA
23 Market Enthusiasts Attending
This is the first of hopefully many monthly meetups for our group!If you’re an active investor, trader, or have an interest in meeting and chatting about markets… we’d love it if you joined us!Come as you are.Find Elaine at the bar.
A shitty app called Meerkat is raising money at a $50M valuation. Perhaps the only thing keeping it from being priced at a billion is the fact that the herd can’t come charging in. Restricted demand.
A market bubble needs a propagating mechanism, a process by which new investors are attracted into the market to keep the price momentum going (on the way up) and existing investors are induced to flee (on the way down). [1]
Liquidity also results in burst bubbles. As long as no one can sell anything, the price will never go down. In an illiquid market, Meerkat will sit on its last-traded price forever. I’m not sure if that’s a good thing, but in theory that means the bubble doesn’t pop.
Aswath Damodaran is a little late to the Hate-on-Mark-Cuban game, but he makes a very important point: Mark Cuban became a billionaire by creating a crappy internet company in the 90s. Broadcast.com was a negative-profit company that put local radio stations on the internet, and Yahoo bought it for $5.7B at the height of the dot-com bubble.
Mark Cuban thinks this tech bubble is worse than the last one only because he’s not profiting off the excesses this time.
If Cuban is serious about staying out of bubbles, he should look at the largest investment in his portfolio, which is in a market where prices have soared, good sense has been abandoned and there is very little liquidity. In a market where the Los Angeles Clippers are priced at $2 billion and the Atlanta Hawks could fetch a billion, the Dallas Mavericks should go for more, right?
This bubble is even better than the dot-com bubble.
