Financial bubbles 101 (for techies) - put simple series

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+ Konstantyn Spasokukotskiy 9 months ago
guest5a60ea,

glad it resonated with you. Thank you for covering the story and encouraging feedback.

I would extend the applicability of the presentation. The dotcom issue is surely the case, but the recent housing crisis is a similar specie too, no significant difference. The mechanics of CDO is different. The origin of the value isn’t anchored in the technology community. The idea -though- is the same: sell a value substitute as a value, create a competitive market for this 'value', buzz and profit.

My point is that the entire economy is a bubble. This is true for the USA and for the rest of the World. The only difference is, how much hot air pumps the wealth of different regional markets. As I mentioned for the US it is some 80%.

Bubbles burst if they are overinflated in comparison to other bubbles (by economic sector.) The overvaluation during the Great Depression was around 30 to 50%. It was enough to explode. I think, it was because the agicultural-economy was real. The 30-50 was a striking difference. Today the consolidated and corporations-controlled US agricultural economy is a bubble itself. The 80% of hot air seems to cause less difference in value perception. All IMHO.
+ guest5a60ea 9 months ago
This presentation hit me on many levels. I am an economist by training, a entrepreneur by choice, and a bubble maker by fate. The economic process described for products coming to market and getting to the point of delivering an artificial product in the form of stock is simple, yet elegant in its delivery of a complex message. At the higher level, I think it is insightful and brilliant because this is exactly what we saw happen during the dot.com rise and fall. Exactly. Because a lot of the technology only had percieved value and not real value, the stocks that were bought and sold, reflected that bubble with nothing but air in side and it popped. Lastly it struck me as way too cynical. At the macro economic level, yes these bubbles represent the cycle, but we must remain faithful that at the micro economic level, there is valuable technology being created that is worthy of investment to bring to market and for an investment banker to create even further value for the company and stock holders so more money can be used to bring expand the value the technology has brought to the market. Otherwise it is almost a kafka-like exercise in futility. Yet, we only need to look around to see that there has been and continues to be great innovation that changes our daily lives on an almost daily basis and that innovation would not be in the market had it not been for the investor and investment banker that saw some potential, mostly to make money, in helping that entrepreneurs bring that technology to market. The concluding charts hit it right on and give entrepreneurs and their encouragers the charge to carry on with inside secrets on how to get it done. Read my entire post regarding this slide show at www.entrepreneurblogspace.com
+ Konstantyn Spasokukotskiy 10 months ago
Thank you for your opinion.

EnergyDude, it is called irony. And I think it is appropriate here. Or explain, how the described here state in our society can be swallowed by any normal mind without an outburst of rage enegry? ;) And yet we need cold-minded actions to change the situation, not the emotions. From this perspective, your constructive improvement ideas are welcome.

As for the audience, the preso has been placed in the education section.
+ EnergyDude 10 months ago
I wonder who the audience is for this slideshow... as a 'techie' I found it pretty silly and belittling. Perhaps better to aim it at a high school audience?

Notes on slide 1

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Financial bubbles 101 (for techies) - put simple series - Presentation Transcript

Understanding financial bubbles. For technology companies and startups by Konstantyn Spasokukotskiy BUBBLES 101 for techies what it is put simple photos: flickr.com by Konstantyn
s a t t e r n p
T tech
~ 20% shareholder value IN ~ 80% shareholder value (US corporations) IN
The from friend to foe
don’t stick here nominal value promised value equipment is useless unless it works consumable value plan to pass through
By all means 5 hold the ground An entrepreneur might think to lure a spoiled investor by the inadequate riches. Don’t! The later bubble stage is entrepreneur’s ally. Spoiled guys will die off. Don’t go there along.
Dec.2008