[prklmn]

A major difference between between this tech boom and the dot com boom of the 90s is the general public had a real shot at investing in serious growth potential during the dot com boom. Now most of the growth is experienced under private ownership, then the grossly overvalued company is pawned off for the public to invest in. VCs have figured out how to extract most of the exciting gains.

[sgustard]

"Investing" in those days was "speculating." Hundreds of dubious companies made it to IPO that would never make it that far today, and most of those lost all their public investors' money.

https://mattermark.com/technology-company-ipos-then-now/

[michalu]

Well, Snap is losing $2 billion a quarter... how's that not a dubious IPO?... Uber's market cap is now 1/3 of WalMart a company with 485.9 billion in revenues.

For comparison, Webvan hit $8 billion market cap, losing $400 million a year, Uber's on $69 billion (hasn't even IPOd yet) losing $3 billion last year.

[suprfnk]

Replace 'companies' with 'cryptocurrency', and you have your exciting market today!

Hundreds of dubious cryptocurrencies of which a few might make it far.

[sah2ed]

John Bogle's investment philosophy [0], which I agree with, boils down the difference between investing and speculating to the time horizon: "The main difference between investment and speculation lies in the time horizon."

So in a way, I think you and the parent are both right -- you are talking about different sides of the same thing.

[0] https://en.wikipedia.org/wiki/John_C._Bogle#Investment_philo...

[hellworld]

Another one of Bogle's self serving comments. He's a legend but rarely unbiased. The key difference is the speculator buys it purely in the hope of flipping it. The investor considers the fundamentals of the investment. Time horizon is irrelevant. You can have special sits which you are in and out of in a month or so; but it's definitely an investment.

[toomuchtodo]

We are all hoping to flip our investments in the equities market; no one is holding forever. Unless you intend to die and pass your ownership interest to heirs.

[concede_pluto]

Buffett's favorite holding period is forever. Cuban points out that non-dividend stocks aren't much more than baseball cards. Kiyosaki argues that the reason people suffer financially is that they purchase liabilities and list them under the asset column.

The difference between investing and speculating is whether you get paid for owning it or only for finding a greater fool to relieve you of it. The wheels have come off the equities market because management has realized putting on a convincing show for speculators nets more dumb money than actually succeeding as a business worth owning.

[hellworld]

Cuban doesn't know anything about public market investing. But what do I know, I've just worked at a hedge fund for most of my career.

Buffett holds LT due to tax deferral benefits conferred by the US tax system. If there were no capital gains taxes he'd be a different animal.

[baron816]

Whether that wealth is going to the top 1% or to the top .01% doesn't matter so much as far as the welfare of the general public is concerned. I think you could argue that the products that these tech companies are bringing to market are what is really benefiting the general public, much more than any investment returns ever could. And if the current model of investing is most efficient--in terms of generating new products and delivering them to market--then it is better for the public.

[j7ake]

What is the public benefit of snapchat ?

[vecter]

Seriously? People use it as a form of communication. It makes people feel closer to their friends. That has enormous value.

[jakubp]

So this is interesting. You may feel closer to people you haven't seen for a while when they are always "with" you on Snapchat -- I have certainly experienced that with people I don't talk to often or people who live on another continent.

But then again, I can't shake the feeling that this is more about fun than really being close. I remember having close friends in high school and at the university. We spent many hours a day together for several years. Can't fake that, and I doubt anything like that will be born through Snapchat or similar tools.

You sound quite certain that it has value. However, some claim that "communication" through technology can also alienate people. Some say it's a bit more shallow, that it doesn't have the same feel as actually talking to someone or even touching them for a second or two (really important for bonding).

Value is not always clear. Forgive me a drastic comparison, but factory farming strikes me as similar: it brought cheap, tasty meat to a great number of people, but the jury is still out on whether it's good.

[lordnacho]

> But then again, I can't shake the feeling that this is more about fun than really being close. I remember having close friends in high school and at the university. We spent many hours a day together for several years. Can't fake that, and I doubt anything like that will be born through Snapchat or similar tools.

I've got a whole bunch of friends whom I know mainly from online interaction. Surely that's a new class of friendship, which is useful?

[CodeWriter23]

Try going offline for 2-3 months and see what happens. See how many of those people are real friends who call/email you, or even try to message you through your social media venue of choice.

My recent experience going cold turkey from Facebook revealed 1 friend who noticed my absence and reached out to me.

[jug]

I think there are disadvantages from social networks in the long term as people isolate themselves and allow them to take the place of physical connections, which they don't. But that their advantages from bringing friends to each other is at the same time often without a doubt beneficial. A virtual connection is better than none at all, and I know I would not have the lasting friendships I would have had today if it were not for social networks.

I guess in a perfect world, people would understand the benefits but also fallacies and balance their use of these networks. That's the way I think we could get the most value out of them without exposing ourselves to their issues too much.

[bnjms]

Snap Chat is by far the most social of the "social" media applications.

You really have to see how adolescents use it differently from adults to appreciate this. There is a sort of additional language to it in a similar vein to how we all used AIM and its ilk back in the day. For adolescents, who spend time together as you describe, they spend more time sharing experiences over SC augmenting their continuous in person interactions.

We are in danger of speaking past each other regarding the group and type of connection. But I absolutely believe SC is capable of Bri going people together. I do not believe that about any other Social platform. (Excepting blogs and podcasts but those are very different.)

[lmm]

If you define "real" friendship as spending hours in each other's physical presence then of course you're going to say snapchat isn't "real" - that's just circular reasoning though.

[chii]

> the jury is still out on whether it's good.

i think the jury is in on that - the market being the jury. The overwhelming majority of purchasers decide through no uncertain terms, that factory farming is the way to go.

There are some people who have moral reservations against factory farming, but i believe those numbers are low (despite how loud their voices are). A silent majority (especially through less wealth countries) agree by voting with their wallets.

[j7ake]

What about the tobacco industry? Is it wrong that government set regulations to tax cigarettes and limit advertising?

What about the gambling industry?

I feel in a few decades, this social media will be considered harmful and will be regulated and possibly taxed.

[RodericDay]

Snapchat adds value in the way meth adds value.

[B1FF_PSUVM]

With a whiff of ouija board.

[cft]

Of Facebook?

[eternalban]

That's a bit too clever.

The issue is whether a society that has mutated to a system funneling meaningful wealth gains to 0.01% of its members is on the path to long term health or on the certain path to some sort of catastrophic system failure with a generous dolling out of collatoral damage to the 99.99% that were on the receiving end of "value added" goods and services [only].

[baron816]

True. I don't know if this system is really any better than the system of the 90s. We do know that that one led to a market crash and the current one hasn't (yet). But we very well could have more innovation if companies still IPOed early. I really don't know.

My comment was intended to establish a yardstick to judge them by. Society doesn't value free market enterprise because it's great at enriching a small number of people. We don't like that Dropbox exists because it turned its founders and investors into millionaires and billionaires. We value capitalism because it encourages people to bring new products to market. If society's goal was to enrich a small number of people, then we should've stuck with feudalism. But society wants to enrich society.

[eternalban]

Market crashes of 80s and 90s is not even remotely what I am talking about. Who cares about that.

If a tiny tiny subset of a society has established a system where they are the analog of "judge, jury, and executioner" of what sort of mind products are developed, supported, and made de facto 'necessity of modern life' (such as Google's) then let's stop pretending and call it what is it: an authoritarian system that (ab)uses market mechanisms

[prostoalex]

It's the anomaly of QE, which diverted so much of the institutional private capital from essentially zero-yielding debt markets into private equities markets.

[qeternity]

This wasn't an anomaly, it was the entire rationale for QE: force capital into risk assets.

EDIT: my username is not a coincidence here...

[anovikov]

If you want to replicate 90s experience of the dot-com boom, buy into ICOs now. And the end result will most probably be... well also same to 90s.

[wslh]

ICOs will evolve with more realistic offerings. The DAO disaster only happened one year ago and the community recovered very fast. The main point is the difficulty to access good deals early on and that is what is happening with new IPOs.

[lambdadmitry]

"The community" didn't "recover" because it wasn't broken in the first place. Sure ETH:USD declined, but then went up because everyone and their dog buy or mine cryptocurrencies in hope of getting rich fast (extensive media coverage helps). It's not a sign of a sound economic system, it's a sign of a bubble.

[wslh]

Not saying it is not a bubble. Amazon was part of the dot com era bubble and look at what they are now. When you lower the barrier of entry you have all kind of community members, including the few good ones who don't want to follow a more classical funding approach. In the worst case, all this is an interesting experiment.

[thecupisblue]

Exactly. The "startup boom" that's going on now is staying strong because tech is available to most people and people are becoming more and more accustomed to using services offered by startups. Cryptos are now in the same position tech was in 90's/early2K's - not available or unknown to most people but promoted as "easy money by easy investments". Dozens of useless companies banking in on people chasing cheap money.

[clarky07]

That's what everyone said about facebook, but it's up 4x since IPO, and 8x from the post IPO dip it had.

[the_watcher]

Compare that to the first 5 years of Amazon post-IPO.

[GuiA]

Saving everyone a Google search: AMZN opened at (split adjusted) $1.49. 5 years later it was at $19.47. Over that span, it maxed at $106.69 (Dec 1999).

[clarky07]

it went from $2 to $16 (split adjusted). The real difference is that it was much much smaller at IPO, meaning it's pretty much impossible for FB to continue generating outsized returns whereas Amazon actually did much better from 5-10 or 10-15 than FB possibly could.

[taneq]

The exception that proves the rule, eh?

[austenallred]

The riskiness of the dotcom boom of the 90s crashed so hard it spent the entire stock market into a downward spiral. Maybe it makes sense to have those kinds of risks taken largely in private markets for accredited investors only.

[hkmurakami]

If you invested in all the IPOs from the .com era, would that actually beat the NASDAQ returns over the last 5 years from 2012-2017? Do we really need retail investors to invest in micro cap level companies? Look at the horror stories of people losing their retirement savings on GTAT.

There were a lot of busts from that era and the average person isn't going to be able pick them well.

[xiaoma]

Yes, we need retail investors to be able to invest in micro cap level companies. Nobody independent is going to do well competing against institutional investors who have, better access, faster trades and teams of quants. The only way to win is to play a game they can't play. Micro caps are a good example since institutional investors can't invest in them easily (even buying the whole company doesn't move the needle much for them). The other place where independents have an edge is long time horizons. They don't have anyone to report to or any need to sacrifice the long term in order to make quarterly numbers.

As for the average person picking well, I encourage you to look at the Motley Fool community. There you'll find literally millions of hobbyist investors, some who have been chatting together since the mid 90s and many, many people doing well. Even looking at the medium-active CAPS player (basically their over/under prediction board where anyone can make bull or bear cases on any stock), it's better than what you'd get giving your money to Wealthfront or some other manager.

Blocking retail investors from micro caps would just be one more way insulating the rich from competition with the conscientious. As bad as Sarbox has been, that would be an entirely new way to make the US system less equitable for the masses.

[kogepathic]

> Yes, we need retail investors to be able to invest in micro cap level companies.

No retail investor will invest in a micro cap company because the cost to perform due diligence is too expensive for the amount they want to invest.

Retail/institutional investors want a company they can put 10-1000 million dollars into. For this size of investment, the due diligence research is worthwhile. For a micro cap company, they can't throw that amount of money at them because it'd be larger than the company's market cap, so basically the investor would be buying the whole company (and the investor doesn't want to buy the company, just own a portion of it).

Basically, the administrative overhead for investment institutions is too large for micro cap companies. Just look at how much money is in Small Cap ETFs versus other ETFs.

[chii]

> micro cap

pardon my ignorance, but what is a 'micro cap'?

[ant6n]

A company that's worth millions (instead of hundreds of millions or billions)

[nikcub]

unintended consequence of SOX and over regulation of the public markets.

[k-mcgrady]

That's the way it should be. Around half the world isn't online so these companies can still, at the very least, double in value over the long term. The 'easy' money is gone, sure, but it's probably good that we don't have hundreds of high valued-loss making companies on the public markets.

[omarchowdhury]

It would seem that ICO may change that.