Re:2016. The year we welcome squirrels – Unicorn Bubble
by ra1n85 on Sunday January 17, 2016 @10:19AM
(#10919668)
>The reason people/investors are moving to startups, as I see it, is that other assets are riskier than we thought
Quite the opposite as I would see it. There has been very few places to get a return on capital other than in equities. These crazy valuations are a product of that. When the market sentiment transitions from return on capital to return of capital in 2016 (as it's looking to be getting there), then we'll see these valuations drop.
>The difference is that oil doesn't enjoy the same upside of startups
But they will share a similar downside. Oil is the canary in the coalmine, and downward pressure on its price has broad impact.
Quite the opposite as I would see it. There has been very few places to get a return on capital other than in equities. These crazy valuations are a product of that. When the market sentiment transitions from return on capital to return of capital in 2016 (as it's looking to be getting there), then we'll see these valuations drop.
>The difference is that oil doesn't enjoy the same upside of startups
But they will share a similar downside. Oil is the canary in the coalmine, and downward pressure on its price has broad impact.