LinkedIn share price raises bubble fears

http://www.bbc.co.uk/news/technology-13436866

by Peroni • 15 years ago

14 14 15 years ago

bbc.co.uk

ignifero2• 15 years ago

Can you actually stop a bubble from forming or busting? Are there any documented examples?

danmelnick• 15 years ago

My understanding is that bubbles form when money is cheap and is chasing returns. If interest rates went up and/or the money supply was dampened and people had incentive to not chase returns in markets like tech, a bubble would be less likely to form.

That said, the psychology of bubbles is difficult to stop once it gains momentum.

The problem is that an entity like the fed doesn't have better information than the markets about appropriate asset pricing, so attempts to dampen bubbles might turn out to be premature or ill advised.

That's my $.02, I'm not a trained economist, just an armchair observer.

dataminer2• 15 years ago

Regarding the cheap money, isn't it better for markets to decide the interest rate rather than the Fed? Are there any examples in history where a country left the interest rate to be set by the market.

smokeyj2• 15 years ago

In a way, most economists are armchair observers. Economists don't have "practice" economies in which theories are testable -- we ARE the test dummies. It's unfortunate they run the same experiment over and over: http://en.wikipedia.org/wiki/Hyperinflation

PaulJoslin• 15 years ago

The key issue I find with these bubble's is that, once the bubble forms - the media / hype behind the bubble causes the bubble to grow.

The growth of the bubble makes many people rich and therefore, creates even more mass media / hype about the 'bubble'.

This final stage makes everyone who is outside the bubble, wish they could get in on the 'action' of the bubble. People invest at any price, valuations continue to rise way past a realistic point and the whole thing is destined for failure.

When the first cracks emerge and the price proves to not support the reality of investment the whole things begins to tumble down.

I personally don't blame the people in the bubble initially for the collapse, but rather the media for driving the bubble's growth outside of the bubble's expertise.

dataminer2• 15 years ago

If there is financial incentive to keep the growth of the bubble going isn't it in the interest of first movers to influence the markets by feeding media with "get rich quick" stories.

powerslave12r• 15 years ago

I hear all these talks about Linked helps people connect and make contacts and keep in touch and yada yada, can anyone on HN actually share some personal experiences in which Linked In may have helped them at all?

Cause personally, I think it's no use to me, but I am willing to take advantage of something I might be overlooking.

chollida1• 15 years ago

I use it all the time to look at a candidates resume.

It's easy to put anything you want on a paper resume that you hand me.

It's much harder to put a bunch of lies on your resume when all your peers can see it.

orijing3• 15 years ago

Interestingly I wrote an answer on Quora that describes a game-theoretic analogy to asset price bubbles: http://www.quora.com/Is-there-a-(game-theory)-game-which-cap...

While I'm not sure if LinkedIn's price is a sign of a bubble, even if it were a bubble price appreciation can be sustained by the forces described in the answer above. The only question is for how long.

LinkedIn share price raises bubble fears

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