[Naritai]

Your assumption of 10% breakout is based, on some level, an assumption that each company's valuation is uncorrelated with the others, and each company will rise and fall on its merits. However, the nature of bubbles is that valuations become based on underlying structural reasons - this is what happened during the housing bubble as well. Statistical generalizations such as 'even if up to x% of people default on their loans, we'll still make money' were used to justify unreasonable investments in homes, which in turn drove a real estate valuation bubble.

Well, here's what we learned in 2008 - in a down market, it's possible for _way_ more than x% of people to default all at the same time.

[gphil]

Yeah, I wouldn't rule out the possibility of structural problems--we've never seen this phenomenon before so it's hard to say how it will turn out.

I was just trying to point out that it's not impossible for the current crop of unicorns to produce big enough winners to outweigh the failure of the rest.

I'm definitely skeptical that this will happen though, because the winners would have to be really big (hundreds of billions in actual market cap in the public markets) in order to make up for the really big failures.